Q1 2025 Kayne Anderson BDC Inc Earnings Call
Presentation.
Speaker Change: As a reminder, this conference is being recorded and it is now my pleasure to turn the conference over to Terry Hart, Chief Financial Officer of KBC.
Speaker Change: Good morning, and welcome to Kayne Anderson BDC Inc's first quarter 2025 earnings call today, I'm joined by Doug Goodwillie, and Ken Leonard Co Ceos of KBC, and Lee Feingold, our private credit managing director.
Speaker Change: Following our prepared remarks, we will be available to take your questions.
Speaker Change: Today's call May include forward looking statements such statements involve known and unknown risks uncertainties and other factors and undue reliance should not be placed there on <unk>.
Speaker Change: These forward looking statements are not historical facts, but rather are based on current expectations estimates and projections about the company, our current and prospective portfolio investments our industry, our beliefs and our opinions in our assumptions.
Speaker Change: These statements are not guarantees of future performance and are subject to risks uncertainties and other factors some of which are beyond our control and difficult to predict.
Speaker Change: Actual results may differ materially from those expressed or forecasted in the forward looking statements.
Speaker Change: We ask that you refer to the company's most recent filings with the SEC for important risk factors any forward looking statements made today do not guarantee future performance and undue reliance should not be placed on them.
Speaker Change: The company assumes no obligation to update any forward looking statements at any time, our earnings release 10-Q, and supplemental earnings presentation are available on the financial section of our website at Kayne BDC Dot com.
Doug Good: Now I'd like to turn the call over to Doug Good really.
Speaker Change: Thank you Terry and thank you everyone for joining us on the call today.
Speaker Change: I would like to start with an overview of our financial results before discussing investment activity during our strongest first quarter of deployments since inception I.
Speaker Change: I will then turn to our portfolio makeup in performance and finally I'll close out with some thoughts on current market conditions, including the constantly evolving market backdrop <unk>.
Speaker Change: Turning it over to Terry Hart to discuss <unk> financial results in more detail.
Terry Hart: During the first quarter of 2025, we generated net investment income of <unk> 40 per share and net income of 31 per share.
Terry Hart: During the quarter, we distributed or <unk> 40 per share regular dividend.
Terry Hart: <unk> per share special dividend.
Terry Hart: As of March 31.
Terry Hart: Our estimated spillover of net investment income was 22 per share.
Terry Hart: In February.
Terry Hart: We also had our second of three lock up releases, Alaska, which will occur on May 21.
Terry Hart: Turning to our private middle market investment activity as highlighted in our last earnings call.
Terry Hart: Our first quarter actively benefited from a robust pipeline and supportive market conditions, highlighting our ability to originate high quality deal flow.
Terry Hart: We made $340 million of total commitments across 16 different businesses during the period of which $264 million was funded.
Terry Hart: This number is 113% increase from the $160 million of commitments made in the first quarter of 2024.
Terry Hart: We also thought it was important to highlight that we were able to maintain an average spread over so for a 549%.
Terry Hart: And a weighted average net senior leverage ratio of four times.
Terry Hart: When we add in our existing unfunded commitments funded during the quarter, we invested $294 million.
Terry Hart: Again. This compares favorably to the first quarter of 2024, where gross fundings for $148 million.
Terry Hart: Repayment activity during the quarter totaled $86 million of gross repayment up from $32 million in the first quarter of 2024, but still only 4% of average funded investments.
Terry Hart: During the quarter, our broadly syndicated loan portfolio experienced no new fundings in line with our plan.
Terry Hart: And $27 million of repayments for the total portfolio of approximately $113 million.
Terry Hart: We plan to continue to wind down our broadly syndicated loan portfolio over the course of the year.
Terry Hart: When considering all funding and repayment activity.
Terry Hart: Net funded deployment for the quarter was approximately $181 million. This.
Terry Hart: This increase raised our debt to equity ratio.
Terry Hart: Eight six times above our fourth quarter 2024 debt to equity ratio of <unk> 72 times and also on pace to hit our target range of one to one and a quarter times in the next two quarters.
Terry Hart: Turning to our portfolio composition as of March 31.
Terry Hart: K Bdc's portfolio includes 116 individual portfolio companies, representing $2 2 billion of fair market funded value investments, we have another $236 million of unfunded commitments comprised of a mix of unfunded revolvers and delayed draw term loans.
Terry Hart: Our total portfolio commitments are in excess of $2 4 billion.
Terry Hart: Since March 31, 2025, K BDC has closed or is in the final closing process.
Terry Hart: On an additional $150 million of fundings highlighting the continued strong start to originations for 2025 and evidenced in our continued ability to scale our portfolio.
Terry Hart: Even during periods of market uncertainty.
Terry Hart: As of March 31, 2025 investments NK Bdc's portfolio, excluding those on our watch list.
Terry Hart: Have a weighted average leverage of four two times interest coverage of three two times and an LTV of approximately 43% evidencing our conservatism in loan structuring.
Terry Hart: We have also built a diversified portfolio with an average position size of <unk>, 9% of fair value and where our top 10 investments represent only 18% of the portfolio.
Terry Hart: Outside of the specific credit statistics associated with the portfolio, our investments are well structured with over 90% of our portfolio invested in first lien securities and 99% of our private middle market investments being backed by private equity sponsors. Additionally.
Terry Hart: All of our core first lien private middle market investments have financial covenants.
Terry Hart: 100% of our debt investments are floating rate.
Terry Hart: Mirrors, our liabilities, where the vast majority of our debt funding utilize this floating rate borrowings as well.
Terry Hart: Credit performance across our portfolio remains strong to date.
Terry Hart: But only one 6%.
Total debt investments at fair value on non accrual represented by only four positions out of 116.
Terry Hart: Lastly, we have built this conservative portfolio with a healthy weighted average yield of approximately 10, 4% on fair value of investments.
Terry Hart: This yield has been achieved with approximately 10% of our portfolio invested in broadly syndicated loans.
Terry Hart: So we are well positioned for upside in spreads relative to our competitors over the next few quarters as we continue to rotate out.
Terry Hart: Of these lower spread.
Terry Hart: Broadly syndicated investments.
Terry Hart: Our private credit strategy has remained consistent through various cycles, making investments in senior secured loans to middle market sponsor backed businesses.
Speaker Change: Over 14 years at Kayne Anderson.
Terry Hart: And a prior plus two decades.
Terry Hart: At other platforms, we have one of the longest tenured partnerships in middle market direct lending during.
Terry Hart: During our time at <unk> alone, we have invested over $13 billion to nearly 230 businesses through nearly 430 discrete transactions, which is a testament to the value of our platform delivers for our sponsor partners. We think the quality of the team and our experience managing through volatile markets is important.
Terry Hart: To highlight given the recent market disruption caused by tariff discussions and other political uncertainties.
Terry Hart: As loan activity across the debt markets has declined sharply we believe core mid market private credit is still providing attractive total return opportunities with significant equity cushion supporting our debt investments.
Terry Hart: We also believe that we are less impacted by spread tightening scene in the larger market given our differentiated focus on more stable defensive core mid market companies.
Terry Hart: Despite a more benign M&A market and current macro uncertainties. We continue to review opportunities that have a spread over so for typically in the 500 to 600 basis points range.
Terry Hart: Our Q1 middle market loans have a spread of approximately 550 basis points.
Despite a more benign M&A market and current macro uncertainties. We continue to review opportunities that have a spread over so for typically in the 500 to 600 basis points range.
Terry Hart: We will of course remain highly selective and disciplined in our capital allocation in all market environments.
Terry Hart: And since Liberation day, the market has been in more of a discovery mode with lower M&A volumes and if anything spreads.
Q1, middle market loans have a spread of approximately 550 basis points.
Terry Hart: Spreads and fees have seen a slight increase in.
We will of course remain highly selective and disciplined in our capital allocation in all market environments.
Terry Hart: And the smaller data set of deals priced over the last month.
Terry Hart: With the rapidly evolving policy landscape, we undertook a company by company and ounces to gauge potential exposure to disruption from tariff implementations.
And since Liberation day, the market has been in more of a discovery mode with lower M&A volumes and if anything.
Spreads and fees have seen a slight increase in our smaller data set of deals priced over the last month.
Terry Hart: This analysis included parameters, such as revenue generation and cost of goods sold by geography, direct or indirect tariff exposure and pricing power of our portfolio is diversified by end market and industry with a focus on stable slower growing segments of the U S economy as you can see in our earnings presentation our largest.
With the rapidly evolving policy landscape, we undertook a company by company analysis to gauge potential exposure to disruption from tariff implementations.
This analysis included parameters, such as revenue generation and cost of goods sold by geography, direct or indirect tariff exposure and pricing power of our portfolio is diversified by end market and industry with a focus on stable slower growing segments of the U S economy as you can see in our earnings presentation our largest.
Terry Hart: Industries, our distribution commercial services food products.
Terry Hart: Containers and packaging and health care providers.
Terry Hart: We're the largest representing only 15, 4% of the total portfolio.
Terry Hart: Our deal teams have been in close dialogue with our private equity partners as well as each of the management teams around the impact of the current operating conditions.
Industries, our distribution commercial services food products.
Painters and packaging and health care providers.
Terry Hart: While a limited subset of our portfolio has direct exposure to tariff policies. We believe that the majority of companies possess sufficient pricing power to pass through increased costs to customers due in large part to their importance in supply chain and lack of viable alternative products.
With the largest representing only 15, 4% of the total portfolio.
Our deal teams have been in close dialogue with our private equity partners as well as each of the management teams around the impact of the current operating conditions.
While a limited subset of our portfolio has direct exposure to tariff policies. We believe that the majority of companies possess sufficient pricing power to pass through increased costs to customers due in large part to their importance in supply chains and lack of viable alternative products.
Terry Hart: We are and will continue to monitor the portfolio is trade agreements are formalized.
Terry Hart: Despite the uncertain market backdrop, the portfolio is performing very well and we continue to be pleased with the quality of our loan book in Q1, we added one position to nonaccrual, which represents only <unk> 6%.
We are and will continue to monitor the portfolio is trade agreements are formalized.
Terry Hart: The fair market value of our portfolio.
Despite the uncertain market backdrop, the portfolio is performing very well and we continue to be pleased with the quality of our loan book in Q1, we added one position to nonaccrual, which represents only <unk> 6%.
Terry Hart: As mentioned that brings our total non accrual to one 6%.
Terry Hart: Of the fair value of the portfolio.
Terry Hart: K bdc's portfolio generally exhibit.
Terry Hart: Lower leverage and higher interest coverage ratios than our peers a critical advantage in today's elevated rate environment and during periods of economic uncertainty.
The fair market value of our portfolio as mentioned that brings our total non accrual to one 6% of the fair value of the portfolio.
Terry Hart: We feel very comfortable about the types of issuers that we are underwriting those with strong cash flow stability and minimal direct tariff exposure.
K bdc's portfolio generally exhibit.
Lower leverage and higher interest coverage ratios than our peers a critical advantage in today's elevated rate environment and during periods of economic uncertainty.
Terry Hart: We think that this period of volatility will continue in the near term and we will opportunistically look to add attractive loans that enhance the returns of the portfolio.
Feel very comfortable about the types of issuers that we're underwriting those with strong cash flow stability and minimal direct tariff exposure.
Terry Hart: I'll also increasing the quality and stability of our holdings.
Terry Hart: As a reminder, K bdc's investment team conducts direct hands on diligence the management teams or prospective portfolio companies visits all critical operating facilities. This comprehensive diligence process includes detailed business diligence inclusive of multiple management meetings and plant sites and tours.
We think that this period of volatility will continue in the near term and we will opportunistically look to add attractive loans that enhance the returns of the portfolio.
While also increasing the quality and stability of our holdings.
Speaker Change: As a reminder, K bdc's investment team conducts direct hands on diligence the management teams of prospective portfolio companies visits all critical operating facilities. This comprehensive diligence process includes detailed business diligence inclusive of multiple management meetings and plant sites and tours.
Terry Hart: Interviews with key stakeholders, including customers suppliers and competitors.
Terry Hart: Extensive industry diligence inclusive of the industry expert interviews.
Terry Hart: In depth quality of earnings and accounting reviews conducted by trusted third party providers with whom the team has an established track record and engagement of additional third party advisers when appropriate.
Speaker Change: Interviews with key stakeholders, including customers suppliers and competitors.
Speaker Change: Extensive industry diligence inclusive of the industry expert interviews.
Terry Hart: In conclusion, while there is some turmoil in the market, we feel confident that by capitalizing on our longstanding relationships.
Speaker Change: In depth quality of earnings and accounting reviews conducted by trusted third party providers with whom the team has an established track record and engagement of additional third party advisers when appropriate.
Terry Hart: Providing thoughtful solutions for our partners and supporting our portfolio of companies, we have the financial flexibility to continue to grow the portfolio and to provide a steady dividend for our investors.
Speaker Change: In conclusion, while there is some turmoil in the market, we feel confident that by capitalizing on our longstanding relationships.
Speaker Change: And with that I'll turn it over to Terry Hart to discuss <unk> first quarter 2025 financial results.
Speaker Change: Providing thoughtful solutions for our partners and supporting our portfolio of companies, we have the financial flexibility to continue to grow the portfolio and to provide a steady dividend for our investors.
Terry Hart: Thanks, Doug, Let's first review results of operations.
Speaker Change: During the first quarter, we earned net income per share of 31.
Speaker Change: And with that I'll turn it over to Terry Hart to discuss <unk> first quarter 2025 financial results.
Speaker Change: And net investment income per share was <unk> 40, compared to 48 in the prior quarter.
Speaker Change: The decline in net investment income was mainly due to the exploration of the incentive management fee waiver as a reminder, in conjunction with our IPO Kayne Anderson instituted a 25 basis point fee waiver of our base management fee through May 23, 2025.
Terry Hart: Thanks, Doug, Let's first review results of operations.
Terry Hart: During the first quarter, we earned net income per share up 31.
Terry Hart: And net investment income per share was <unk> 40 <unk>.
Terry Hart: Compared to <unk> 48 in the prior quarter the.
Terry Hart: The decline in net investment income was mainly due to the exploration of the incentive management fee waiver as a reminder, in conjunction with our IPO Kayne Anderson instituted a 25 basis point fee waiver of our base management fee through May 23, 2025.
Speaker Change: A full waiver of our income based incentive fees that expired on December 31 2024.
Speaker Change: Total investment income for the first quarter was $55 2 million as compared to $56 3 million in the prior quarter.
Speaker Change: The decrease to investment income was primarily driven by the reduction to sofa.
Terry Hart: Full waiver of our income based incentive fees that expired on December 31, 2024.
Speaker Change: And the point 6 million impact of placing seeger leg on non accrual status during the quarter.
Terry Hart: Total investment income for the first quarter was $55 2 million as compared to $56 3 million in the prior quarter.
Speaker Change: These reductions were partially offset by income generated from net additions to the portfolio during the first quarter.
Terry Hart: Decreased to investment income was primarily driven by the reduction to so far.
Speaker Change: It's worth noting that the majority of the decrease to our portfolio yield was related to lower reference rates and that only 6% of our interest income for the quarter related to Pik interest.
Terry Hart: And the $6 million impact have placed <unk> on non accrual status during the quarter.
Terry Hart: These reductions were partially offset by income generated from net additions to the portfolio during the first quarter.
Additionally, during the first quarter, we had approximately <unk> 9 million of accelerated amortization of OID as a result of realization activity.
Terry Hart: Worth, noting that the majority of the decrease to our portfolio yield was related to lower reference rates and that only 6% of our interest income for the quarter related to Pik interest. Additionally, during the first quarter, we had approximately <unk> 9 million of accelerated amortization.
Speaker Change: Total expenses for the first quarter were $26 5 million compared to $22 3 million for the prior quarter.
Speaker Change: The increase was primarily related to the exploration of the incentive fee waiver of $4 $5 million impact.
Terry Hart: Oh IP as a result of realization activity.
Terry Hart: Total expenses for the first quarter were $26 5 million compared to $22 3 million for the prior quarter.
Speaker Change: During the quarter, our incentive fee was reduced by the 12 quarter look back incentive fee cap.
Speaker Change: During the first quarter, we had a realized gain of $6 million on the sale of an equity co investment and we had net unrealized losses on the portfolio of $6 5 million compared to unrealized gains of $1 4 million in the prior quarter.
Terry Hart: The increase was primarily related to the exploration of the incentive fee waiver of $4 $5 million impact.
Terry Hart: During the quarter, our incentive fee was reduced by the 12 quarter look back incentive fee cap.
Terry Hart: During the first quarter, we had a realized gain of $6 million on the sale of an equity co investment and we had net unrealized losses on the portfolio of $6 5 million compared to unrealized gains of $1 4 million in the prior quarter.
Speaker Change: The unrealized losses were primarily the result of negative fair value changes related to our investments in Sundance single leg in our broadly syndicated loan portfolio. Additionally, we had <unk> 6 million of deferred income tax expense related to unrealized gains on equity investments.
Terry Hart: The unrealized losses were primarily the result of negative fair value changes related to our investments in Sundance Siegel AG and our broadly syndicated loan portfolio. Additionally, we had <unk> 6 million of deferred income tax expense related to unrealized gains on equity investments.
Speaker Change: And our taxable subsidiary.
Speaker Change: As of March 31, total assets were $2 2 billion and net assets were $1 2 billion.
Speaker Change: As of that date, our net asset value was $16 51 per share the.
Speaker Change: The decrease of 19% from $16 70 per share as of December 31st was primarily a result of paying the second of three special dividends of <unk> <unk> per share during the quarter and <unk> <unk> per share related to net realized gains.
And our taxable subsidiary.
Terry Hart: As of March 31, total assets were $2 2 billion and net assets were $1 2 billion as of that date, our net asset value was $16 51 per share.
Terry Hart: The decrease of 19% from $16 70 per share as of December 31 was primarily a result of paying the second of three special dividends of 10 cents per share during the quarter and <unk> <unk> per share related to net realized gains.
Speaker Change: Unrealized losses during the first quarter.
Speaker Change: At the end of the first quarter, we had debt outstanding of 1.0, $1 6 billion and our debt to equity ratio was <unk> eight six times, which was an increase from seven two times at the end of the fourth quarter, we anticipate achieving the low end of our debt to equity range of one times to one in a quarter times.
Terry Hart: And unrealized losses during the first quarter.
Terry Hart: At the end of the first quarter, we had debt outstanding of 1.016 billion and our debt to equity ratio was <unk> eight six times, which was an increase from seven two times at the end of the fourth quarter, we anticipate achieving the low end of our debt to equity range of one times to one and a quarter times.
Speaker Change: In the second or third quarter of 2025.
Speaker Change: During the first quarter of 2025, we continue to increase credit facility borrowings improving the utilization of the facilities and we amended both SPV credit facilities to extend the maturity dates increased capacity and decreased the interest rates on the facilities.
Terry Hart: And the second or third quarter of 2025.
Terry Hart: During the first quarter of 2025, we continue to increase credit facility borrowings improving the utilization of the facilities and we amended both SPV credit facilities to extend the maturity dates increased capacity and decreased the interest rates on the facilities.
Speaker Change: The reduction to our borrowing cost and higher utilization of our credit facilities, resulting from robust origination should be beneficial to net investment income over the balance of the year.
Speaker Change: Looking forward as we increase leverage on our credit facilities to achieve the low end of our debt to equity target range. We plan to Opportunistically issue unsecured notes to provide additional credit facility flexibility and capacity.
Terry Hart: The reduction to our borrowing costs and higher utilization of our credit facilities, resulting from robust origination should be beneficial to net investment income over the balance of the year.
Terry Hart: Looking forward as we increase leverage on our credit facilities to achieve the low end of our debt to equity target range. We plan to Opportunistically issue unsecured notes to provide additional credit facility flexibility and capacity.
Speaker Change: Turning now to our distributions on May one our board of directors declared a regular dividend for the second quarter of 2025 40 per share to shareholders of record on June 32025, and.
Speaker Change: In addition on June 24th we will distribute the final special dividend of <unk> <unk> per share that was previously declared in conjunction with our IPO.
Terry Hart: Turning now to our distributions on May one our board of directors declared a regular dividend for the second quarter of 2025, or <unk> 40 per share to shareholders of record on June 32025.
Speaker Change: As a reminder, these special dividends were established to help support the stock price around share lockup release stage and to pay out excess income earned in 2024.
Terry Hart: In addition on June 24th we will distribute the final special dividend of <unk> 10 per share that was previously declared in conjunction with our IPO.
Speaker Change: As of March 31, our undistributed net investment income was approximately 22 per share.
Terry Hart: As a reminder, these special dividends were established to help support the stock price around share lockup release dates and to pay out excess income earned in 2024.
Speaker Change: Of this amount <unk> 10 per share will be distributed to shareholders through the final special dividend in June.
Speaker Change: For the balance of 2025, we anticipate relatively modest excess net investment income above our base dividend, reflecting the timing of the continued ramp of our portfolio to achieve target leverage ranges and the strategic rotation out of our lower yielding broadly syndicated loan investments into <unk>.
Terry Hart: As of March 31, our undistributed net investment income was approximately 22 per share.
Terry Hart: Of this amount <unk> 10 per share will be distributed to shareholders through the final special dividend in June.
Terry Hart: For the balance of 2025, we anticipate relatively modest excess net investment income above our base dividend, reflecting the timing of the continued ramp of our portfolio to achieve target leverage ranges and the strategic rotation out of our lower yielding broadly syndicated loan investments.
Speaker Change: Middle market loans.
Speaker Change: We believe our total dividend yield and dividend coverage will more accurately reflect our steady state operations. When KBC is operating at its leverage targets with the portfolio fully invested in middle market loans.
Terry Hart: Into middle market loans.
Speaker Change: In closing we are pleased to announce that we have renewed our $100 million share repurchase plan for an additional year following the anniversary of our IPO.
Terry Hart: We believe our total dividend yield and dividend coverage will more accurately reflect our steady state operations. When KBC is operating at its leverage targets with the portfolio fully invested in middle market loans.
We're encouraged by the performance of our stock to date.
Speaker Change: And want to continue to support our shareholders by extending the plan.
Terry Hart: In closing we are pleased to announce that we have renewed our $100 million share repurchase plan for an additional year following the anniversary of our IPO.
Speaker Change: With that operator, please open the line for questions.
Speaker Change: Thank you and we will now begin the question and answer session.
Terry Hart: We are encouraged by the performance of our stock today.
Speaker Change: If you have dialed in and we would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.
Terry Hart: And want to continue to support our shareholders by extending the plan.
Terry Hart: With that operator, please open the line for questions.
Speaker Change: If you would like to withdraw your question simply press Star one a second time.
Terry Hart: Thank you and we will now begin the question and answer session.
Speaker Change: You are called upon to ask your question and our listening via Speakerphone on your device. Please pickup your handset and ensure that your phone is not on mute when asking your question.
We would like.
Terry Hart: Please press star one on your telephone keypad.
Speaker Change: Again, it is star wanted to join the queue.
John: John Thank you.
Terry Hart: If you would like to withdraw your question. Please.
Doug Harter: And our first question comes from Doug Harter with UBS. Your line is open.
Speaker Change: One second.
Speaker Change: If you are called upon to answer to your question and you are listening via speakerphone on your.
Doug Harter: Thanks, I was hoping you could just give a little more clarity.
Speaker Change: Please pickup your handset.
Speaker Change: Your phone is not on mute when asking your question.
Doug Harter: Clarity comfort around.
Speaker Change: Yeah sure wanted to join the queue.
Doug Harter: Kind of that timeline, you gave to achieve your target leverage kind of what youre seeing in the pipeline today and kind of how those spreads on those deals youre looking at today might compare to kind of three or six months ago.
Doug Harter: And our first question comes from Doug Harter with UBS. Your line is open.
Doug Harter: Thanks, I was hoping you could just give a little more.
Doug Harter: Clarity comfort around.
Doug Harter: Kind of that timeline, you gave to achieve your target leverage.
Ken Leonard: Yeah. Thanks, Doug This is Ken.
Doug Harter: Kind of what Youre seeing in the pipeline today and kind of how those spreads on those deals youre looking at today might compare to Q3.
Doug: As mentioned Q1 was very strong origination quarter for us our new investment spreads were around 549, or so for which is a pretty nice premium to the market at large the markets. Obviously pulled back to some degree in the second quarter in terms of deal activity just given the certain macro environment that we're all seeing in term.
Doug Harter: <unk> three or six months ago.
Ken: Yeah. Thanks, Doug This is Ken.
Ken: As mentioned Q1 was very strong origination quarter for us our new investment spreads were around 549 over silver, which is a pretty nice premium to the market at large.
Ken Leonard: What's going on with tariffs.
Ken Leonard: And the administration, but we still expect Q2 to be net positive in terms of portfolio growth to achieve that growth, we're not having to change our investment parameters. We are still seeing good opportunities in the five to 600 over sofa and we're continuing to see closing fees and spread.
Ken: The market's obviously pull back to some degree in the second quarter in terms of deal activity just given the certain macro environment that we're all seeing in terms of what's going on with tariffs.
Ken: And the administration, but we still expect Q2 to be net positive in terms of portfolio growth to achieve that growth, we're not having to change our investment parameters. We are still seeing good opportunities in the five to 600 over sofa and we're continuing to see closing fees and spread.
Ken Leonard: <unk> that are indicative of what we've been able to achieve over the last few quarters. So I'd say, we're reasonably optimistic right now about being able to achieve our target as we've said to.
Ken Leonard: To get to that target leverage over the next two quarters.
Ken: That are indicative of what we've been able to achieve over the last few quarters. So I'd say, we're reasonably optimistic right now about being able to achieve our target as we've said.
Ken Leonard: Great. Thank you.
Ken Leonard: Of course.
Ken Leonard: Yes.
Speaker Change: As a reminder, its star one if you would like to ask a question.
Ken: To get to that target leverage over the next few quarters.
Ken Leonard: Yeah.
Ken Leonard: Yes.
Ken Leonard: And with no additional questions I will now turn the conference back over to Mr. Ken Leonard for closing remarks.
Ken: Great. Thank you.
Ken: Of course.
Speaker Change: As a reminder, its star one if you would like to ask a question.
Ken Leonard: Thank you operator.
Ken Leonard: Thank everyone for their participation today and support over the last year as we approach our one year anniversary next week of being a public company. We're very proud of what K BDC is achieved and the market position. We've earned as a value oriented risk reward driven company we remain excited.
Speaker Change: And with no additional questions I will now turn the conference back over to Mr. Ken Leonard for closing remarks.
Ken Leonard: Thank you operator.
Speaker Change: Thank everyone for their participation today and support over the last year as we approach our one year anniversary next week of being a public company. We're very proud of what K BDC is achieved and the market position. We've earned as a value oriented risk reward driven company we remain excited.
Ken Leonard: And opportunistic about the remainder of 2025, and we look forward to sharing our continued progress in future calls. Thank you very much.
Ken Leonard: And ladies and gentlemen, this concludes today's call and we thank you for your participation you may now disconnect.
Speaker Change: And opportunistic about the remainder of 2025, and we look forward to sharing our continued progress on future calls. Thank you very much.
Speaker Change: And ladies and gentlemen, this concludes today's call and we thank you for your participation you may now disconnect.
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