Q3 2025 Investcorp Credit Management BDC Inc Earnings Call

be recorded.

Yeah.

Yeah.

Okay.

Speaker Change: Good morning, ladies and gentlemen, and welcome to today's Investcorp credit management Bdcs quarter ended March 31st 2025 earnings call.

Operator: Good morning, ladies and gentlemen, and welcome to today's Investcorp Credit Management BDC's quarter ended March 31st, 2025 earnings call.

Walter Tsin: It is now my pleasure to turn the floor over to Walter Tsin, CFO. Thank you, Operator. Welcome, everyone, to Investcorp Credit Management BDC's quarter-ended March 31, 2025, earnings call.

Speaker Change: It's now my pleasure to turn to Florida over to Walter Chen CFO.

Steve: Thank you operator, welcome everyone to Investcorp credit management Bdc's quarter ended March 31, 2025 earnings call I'm joined by Steve <unk>, President and Executive Chief Executive Officer of the company and as the months Chief operating officer of the company.

Walter Tsin: I am joined by Suhail Shaikh, President, Chief Executive Officer of the company, and Andrew Muntz, Chief Operating Officer of the company.

Walter Tsin: I would like to remind everyone that today's call is being recorded and that this call is the property of Investcorp Credit Management BDC. Any unauthorized broadcast of this call in any form is strictly prohibited.

Steve: We'd like to remind everyone that today's call is being recorded this call is the property of the basketball credit management BDC.

Steve: Any unauthorized broadcast of this call in any form is strictly prohibited.

Walter Tsin: Audio replay of the call will be available by visiting our investor relations page on our website at icmbdc.com.

Steve: A replay of the call will be available by visiting our Investor Relations page on our website.

Speaker Change: E M. The BBC dot com.

Walter Tsin: I would also like to call your attention to the Safe Harbor disclosure in a press release regarding forward-looking information and remind everyone that today's call may include forward-looking statements and projections, actual results may differ materially from these projections. We will not update forward-looking statements unless required by law, so to obtain copies of our latest SEC filings, please visit the company's registration statement on the SEC's EDGAR platform. or our investor relations page on our website.

Speaker Change: I would also like to call your attention to the Safe Harbor disclosure in our press release regarding forward looking information and remind everyone that today's call may include forward looking statements and projections actual results may differ materially from these projections.

Speaker Change: We will not update forward looking statements unless required by law to obtain copies of our latest SEC filings. Please visit the company's registration statement on the SEC Edgar platform.

Speaker Change: Or.

Speaker Change: Our Investor Relations page on our website.

Walter Tsin: The format for today's call is as follows.

The format for todays call is as follows. So he will provide an overall business and portfolio summary, and I'll then provide an overview of our results summarized.

Walter Tsin: Suhail will provide an overall business and portfolio summary, and I'll then provide an overview of our results, summarized... followed by a quick Q&A.

Sale: I think the financials followed by a quick Q&A at this time I would like to turn the call over to sale.

Suhail Shaikh: At this time, I would like to turn the call over to Suhail. Thank you all and thank you to everyone for joining us today. We are pleased to share that the first quarter of 2025 marks a period of continued progress and last stability for ICMP. Our strategic priorities over the past several quarters have centered around resolving legacy credit issues and repositioning the portfolio for steady performance. For the quarter ending March 31, 2025, we reported net investment income before taxes of $0.7 million, or $0.05 per share, compared to $0.06 per share in the prior quarter. Annette asked the value of the share increase $0.03 per share to $5.42 compared to $5.39 as of December 31, 2021.

Sale: Thank you art and thank you to everyone for joining us today.

Sale: We're pleased to share the first quarter of 2025 lakhs.

Sale: Progress at NAV stability.

Sale: Yep.

Sale: Our strategic priorities over the past several quarters.

Sale: That's centered around resolving legacy credit issues and repositioning the portfolio from steady.

Sale: For the quarter ending March 31 2025.

Sale: Net investment income before taxes.

Sale: One 7 million.

Sale: Or five cents per.

Sale: Sure and batch of six cents a share in Nebraska.

Sale: Our net asset value per share increased 2%, which added $5 important tucson compared to $5 39.

Sale: As of December 31st 2020.

Suhail Shaikh: The increase in NAF was primarily driven by an increased non-realized gain, offset by a decline in net investment income per share, which was largely due to reduced investment activity during the quarter, and a continuation of repayment. We believe this trend is reflected in the broader market environment where heightened uncertainty, infused M&A, and financing activity have slowed new deals. We are encouraged, however, that market fundamentals remain intact. and expect activity to pick up as macro uncertainty related to tariffs improves. Despite this, our portfolio remains stable and we continue to prioritize credit quality and long-term value creation for our shareholders.

Sale: The increase in NAV was primarily driven by an increased non realized gain offset by a decline in net investment income per share, which was largely due to reduced investment activity and order and a continuation of prepayments.

Sale: We believe this strategy is reflected in the broader market environment.

Heightened uncertainty used M&A and financing activity has slowed.

Sale: Yes.

Sale: The market fundamentals remain intact.

Sale: Unexpected activity picked up as macro uncertainty related to that.

Sale: Despite this our portfolio remains stable and we continue to prioritize credit quality and long term value creation for our shareholders.

Suhail Shaikh: We have significantly reduced the number of non-accruals and now have just two investments in non-accruals set. representing approximately 1.7% of the total portfolio fair value down from five investments to 3.6% of fair value in the previous quarter. This marks a meaningful shift and underscores the success of our disciplined investing approach. as well as putting the most challenged names behind us. And as a result, we expect more stable earnings profiles for the remainder of 2025, notwithstanding any macro.

Sale: We have significantly reduced the number of non accruals and now have just two investments on non accrual status.

Representing roughly one 7% of yogurt portfolio.

Sale: I'm from five investments a cheap one 6% of fair value and the previous quarter.

Sale: This marks a meaningful shift and underscores the success.

Sale: Disciplined investing abroad.

Sale: As well as putting the most challenged names behind us.

Sale: We expect more stabilized profiled for the remainder of 2025, notwithstanding any macro shocks.

Sale: Turning to the broader market, we continue to see a noticeable slowdown in new deal activity.

Suhail Shaikh: Turning to the broader market, we continue to see a noticeable slowdown in new deal activity. Their concerns and broader geopolitical uncertainty have contributed to a decline in M&A volumes and sponsor-led finance. While this has impacted our deployment base, we remain highly selective regarding to wait for opportunities that meet our risk-adjusted return threshold. We believe patience and discipline in this environment will ultimately be rewarded. While cautiously optimistic that deal activity will rebound, we view a reduction in macro volatility as a necessary condition for that to occur.

Speaker Change: Yeah, I have concerns as well as geopolitical uncertainty has created.

Sale: That contributed to a decline in M&A.

Speaker Change: Volume as possible.

Sale: Well at this time.

Sale: In fact without deployment base, we remain highly selective for binding to wasteful opportunities that meet our risk adjusted return thresholds.

Sale: We believe patience and discipline in this environment binocular can't beat or water well.

Sale: Well cautiously optimistic that well be bound if you will.

Sale: <unk> and macro volatility is a necessary condition for that to occur.

Sale: In addition.

Suhail Shaikh: Inegration. We continue to believe our 420 has well-positioned to weather the shifting economic environment. As an update of the prior quarter and as we continue to have more clarity on direct tariff exposure based on conversations with management and sponsors, we estimate that less than 20% of our portfolio may experience moderate direct effects from tariffs. and that was as of the beginning of the tariff announcement. Importantly, the companies potentially affected are actively implementing medication strategies, including bouncing through price increases, switching to diversified suppliers, and improving supply chain efficiency. We believe these proactive measures, coupled with the operational strength of both pulling companies, provide a solid foundation for navigating these sectors.

Sale: We continue to believe that he is well positioned to weather the shifting economic environment.

Sale: As an update to the frac water on that.

Sale: We have full clarity on direct exposure based on conversations with management and sponsor.

Sale: We estimate that less than 20% of our portfolio mix feed and smarter if direct effect from status.

Sale: And that's what that's all.

Sale: Beginning of the downturn now.

Sale: Importantly, the companies actually affected are actively implementing mitigation strategy.

Sale: Passing through price increases, especially in the bestbuy supply.

Sale: And improving supply chain efficiency.

Sale: We believe these proactive measures coupled with the operational strength of our portfolio companies to provide a solid foundation navigating through separate.

Suhail Shaikh: Overall, our direct exposure to data remains minimal and we will continue engaging with portfolio companies to monitor and manage these risks going forward.

Sale: Overall, our direct exposure to that.

Sale: Remains minimal and we will continue engaging with portfolio companies to monitor and manage these risks going forward.

Andrew Muntz: I will now turn the call over to Andrew to discuss the details about portfolio activity during the pandemic. Thank you, Suhail. During the quarter ending March 31st, we invested in one new portfolio company and two existing portfolio companies. Fundings for new investments totaled $5.1 million at cost. The weighted average yield of debt investments made in the quarter was approximately 10.2%. In the same period, we fully realized three portfolio company investments, totaling $7.3 million in proceeds with an IRR of approximately $9.6 First, we participated in the LBO transaction of Accelevation by Olympus Partners. Accelevation is a vertically integrated provider of manufactured products and design installation services to the data center.

Sale: I'll now turn the call over to Andrew to discuss the details about portfolio activity during the quarter.

Andrew: Thank you Sunil during the quarter ending March 31, we invested in one new portfolio company and two existing portfolio companies.

Andrew: Fundings for new investments totaled $5 $1 million at cost.

Andrew: The weighted average yield of debt investments made in the quarter was approximately 10, 2% and.

Andrew: In the same period, we fully realized three portfolio company investments totaling $7 3 million in proceeds with an IRR of approximately nine 6%.

First we participated in the LBO transaction of acceleration by Olympus partners.

Andrew: Elevation as a vertically integrated provider of manufactured products and design and installation services to the data center market, we invested in the revolver. The first lien term loan and delayed draw term loan our yield at cost is approximately nine 9%.

Andrew Muntz: We invested in the revolver, the first lien term loan, and the lay draw term. Our yield at cost is approximately $9.9 billion. With regards to existing portfolio companies, we made an incremental investment in the First Lean Term Loan of WorkGenius, a leading AI-powered talent platform that connects businesses with highly skilled freelancers. Our yield at cost is approximately 11.3%. Lastly, we also received warrants in career Turning to our realizations, we realized our first lean term loan positions in Victra Holdings and Flatworld Solutions, both of which were refinanced during the quarter. Our realized IRRs on Victra and FlatWorld were 10.5% and 13.5% respectively.

Andrew: With regards to existing portfolio companies, we made an incremental investment in the first lien term loan of work genius.

Andrew: Our leading AI powered talent platform that connects businesses with highly skilled freelancers our yield at cost is approximately 11, 3% as part of our participation in this financing. We also received class a one equity.

Andrew: Lastly, we also received warrants in Careerbuilder.

Andrew: Turning to our realizations, we realized our first lien term loan positions in Victoria Holdings, and flat rolled solutions, both of which were refinanced during the quarter.

Andrew: Our realized irr's on victory and flat world or 10, 5% and 13, 5% respectively.

Andrew Muntz: Finally, we realized our revolver position on American teleconferencing, also known as PG&E. our realized IRR was negative 36. As of March 31st, our five largest industry concentrations by fair market value were professional services at 15.5%, containers and packaging at 9.2%, trading companies and distributors at 8.6%, commercial services and suppliers at 8.0%, and IT services at 7.9%.

Andrew: Finally, we realized our revolver position on American Teleconferencing also known as Pgi.

Andrew: Our realized IRR was negative 36, 2%.

Andrew: As of March 31, our five largest industry Congress concentrations by fair market value were professional services at 15, 5% containers and packaging at nine 2% trading companies and distributors at eight 6% commercial services and suppliers.

Andrew: Zero percent and it services at seven 9%.

Andrew Muntz: Overall, our portfolio companies at quarter end were in 19 GIX industries, including our equity and warrant positions.

Andrew: Overall, our portfolio of companies at quarter end were in 19, VIX industries, including our equity and warrant positions I would now like to turn the call back over to Walt to discuss our financial results. Thanks, Andrew for the quarter ended March 31, 2025, the fair value of our portfolio.

Walter Tsin: I would now like to turn the call back over to Walt to discuss our financial results. Thanks, Andrew. When the quarter ended March 31, 2025, the fair value of our portfolio was $192.4 million compared to $191.6 on December 31. Our net assets were $78.1 million, an increase of $0.5 million from the prior quarter. A portfolio's net increase in net assets from operations this quarter was approximately $2.2 million. The weighted average of our debt portfolio is 10.8% and an increase from 10.4% in the previous quarter ended December 31st. As of March 31st, our portfolio consisted of 43 borrowers, approximately 77% of our investments were in first lien debt, and the remaining 23% were invested in equity.

Andrew: $192 4 million compared to 191 six on December 31.

Andrew: Net assets were $78 1 million, an increase of one 5 million from the prior quarter.

Andrew: Our portfolio's net increase and net assets from operations. This quarter was approximately $2 2 million.

Andrew: The weighted average of our debt portfolio was 10, 8% an increase from 10, 4% in the previous quarter ended December 31st.

Andrew: As of March 31, our portfolio consisted of 43 borrowers approximately 77% of our investments Werent first lien debt and the remaining 23% were invested in equity.

Walter Tsin: Equity Warrant and the other 98.2% of our debt portfolio was invested in floating rate instruments and 1.8% in fixed-rate The weighted average spread on our debt investments was 4.7, a slight increase from 4.3 in a prior quarter. Our average portfolio company issuer on a fair market value basis was approximately $4.5 million, and our largest portfolio company investments on a fair value basis is Biopan at $13.3 million.

Andrew: Equity warrants and the other physicians 90.

Andrew: 98, 2% of our debt portfolio was invested in floating rate instruments, and one 8% in fixed rate instruments.

Andrew: The weighted average spread on our debt investments was $4 seven a slight increase from $4 three in the prior quarter.

Andrew: Our average portfolio of company issuer on a fair market value basis was approximately $4 5 million and our largest portfolio of company investments on a fair value basis is bio pan at 13 six.

Walter Tsin: We are pleased to announce that on April 15, 2025, the Board of Directors declared a distribution for the quarter ended June 30, 2025, of $0.12 per share, payable in cash on June 14, 2025, to all stockholders of record as of May 24, 2025. Gross leverage was 1.53x and net leverage was 1.37x as of March 31st compared to 1.57x gross and 1.42x net respectively for the previous quarter.

Andrew: We are pleased to announce that on April 15th 2025, the board of directors declared a distribution for the quarter ended June 32025 of <unk> 12 per share payable in cash on June 14th 2025 to all stockholders of record as of May 24th 2025.

Andrew: Gross leverage was 153 X and net leverage was one 370 <unk> as of March 31st compared to a one $5 seven X gross and 142 X net respectively with the previous quarter.

Andrew: With respect to our liquidity as of March 31, we had approximately $13 million in cash of which approximately $10 7 million was restricted cash with $44 million of capacity under our revolving credit facility with capital one additional.

Walter Tsin: With respect to our liquidity, as of March 31st, we had approximately $13 million in cash, of which approximately $10.7 million was restricted cash, with $44 million of capacity under our revolving credit facility with capital Additional information regarding the composition of our portfolio is included in our Form 10-Q.

Andrew: Additional information regarding the composition of our portfolio is included in our Form 10-Q.

Walter Tsin: With that, I would like to turn the call over back. Thanks, Walt. As we head into the rest of 2025, we remain focused on maintaining NASA stability, sustainable net investment income, while selectively deploying capital and high-quality opportunity. We believe the second half of the year will provide some interesting investment opportunities given as as volatility in the market. We are proud of the work we have done to position the company to be in a stronger position today than we were 12 months ago, and we are confident in our ability to deliver consistent risk adjustment returns going forward.

Scale: With that I would like to turn the call over back to scale. Thanks Paul.

Scale: We head into the rest of 2025, we remain focused on maintaining NAV stability sustainable net investment income.

Scale: Actively deploying capital in high quality opportunities.

Scale: We believe the second half of the young will provide some interesting investment opportunities.

Scale: Kevin.

Scale: As as volatility in the market.

Scale: We are proud of the work we've done to position the company to being in a stronger position today than me.

Scale: Well have 12 months ago, and we are constantly <unk> ability to deliver consistent risk adjustment John it's Greg.

Walter Tsin: Thank you for your continued support and we look forward to taking your questions.

Scale: Thank you for your continued support and we look forward to taking your questions.

Scale: Yeah.

Scale: Ladies and gentlemen at this time, we will conduct the question and answer session.

Operator: Ladies and gentlemen, at this time we will conduct the question and answer session. If you would like to state a question, please press 7 pound on your phone now. Again, that's 7 pound and you will be placed in the queue in the order received. You may also press 7 pound again to remove yourself from the queue.

Scale: I would like to state a question. Please press seven pound on your phone now again to seven pounds and you will be placed in the queue and the order order received.

Speaker Change: He also perhaps haven't found it again.

Scale: Yourself from the queue.

Operator: Please listen for your name to be announced and be prepared to ask your question when prompted.

Scale: The assistance for your name to be announced and be prepared to ask your question when prompted.

Operator: We are now ready to begin.

Scale: We are now ready to begin.

Paul Johnson: Our first question comes from Mr. Paul Johnson with KBW, go ahead. Yeah, good morning. Thanks for taking my call.

Speaker Change: Our first question comes from Mr. Paul Johnson with K B W. Go ahead Sir.

Paul Johnson: Yeah. Good morning, Thanks for taking my good morning.

Paul Johnson: Um, yeah, one, you know, question I have is just wondering kind of, you know, how can the advisors scale or any sort of benefits that can kind of be provided? The VDC here, as I'm looking at it, you know, the allocation of expenses from the advisor on 1.4 million per year, so it's almost 10 cents a year that shareholders have to eat through just on the expense allocation alone. You know, there's a few items on here. Insurance, I mean, that's a penny per quarter. or East Strip Out, they can come. It doesn't really appear that your cash flow is positive.

Speaker Change: Yeah.

Speaker Change: One.

Speaker Change: Question I have is just.

Speaker Change: I'm wondering kind of you know, how and the advisors scale or any sort of benefit second half.

Speaker Change: Ed.

Speaker Change: The BDC here.

Speaker Change: Because as I'm looking at it.

Speaker Change: The allocation of expenses either.

Speaker Change: One 4 million per year, so that's almost 10 cents a year its shareholders.

Speaker Change: Just on the expense allocation a lot.

Speaker Change: There's a few items on your insurance.

Ken: In the quarter and this quarter, if you strip out Hey, Ken.

Ken: It doesn't really appear that youre cash flow positive so.

Suhail Shaikh: Just wondering, you know, what sort of things could you talk about? Maybe, you know, you're waiving a little bit of fees here, but, you know, is there room from the advisor to waive additional fees? Is that something that they would do if? MII falls below zero, goes negative, anything there, even just on the cost of debt that can be improved, that would be helpful.

Ken: I'm just wondering you know what what sort of pace could you talk about maybe your <unk>.

Ken: Waving a little bit of fees here, but it.

Ken: Is there room from the adviser.

Ken: Additional fees is that something that stay with you.

Ken: NII falls below zero.

Ken: There it goes negative.

Ken: Any anything there.

Ken: Awesome.

Ken: It can be.

Ken: Group that.

Ken: That would be helpful.

Ken: Yeah, that's a great question.

Suhail Shaikh: Yeah, that's a great question. I think I'll try to answer it in two sort of parts. One, the simple answer on waiving fees, that's always something that we can consider. something that's been in our control. The second is absorption of cost. I think it's that and we've mentioned this before as well. We continue to work on scaling the private credit platform at Investcorp. And that is a real-time effort that's going on and has been going on, and it's going to continue to go on. As that happens, there'll be a natural absorption of overhead and expenses that, you know, the advisor is going to bear, which will help the BDC, and also from an allocation of resources, plus as well as, frankly, new deployment as well.

Ken: Hang on.

Ken: Try to answer it in June.

Ken: Box.

Ken: One is.

Ken: The simple answer on.

Ken: Waving fees, that's all of it is something that would be.

Ken: Can consider.

Ken: Something thats been in our control the second is absorption of costs.

Ken: I think as that and we've mentioned this before.

Bob: As Bob.

Ken: We continue.

Bob: Well on scaling.

The private credit platform investcorp.

Bob: And that is around time effort, that's going on and has been going on and then it's going to continue.

Bob: Oh on ASP.

Bob: As that happens.

Bob: Natural absorption.

Bob: They had in expenses that you know.

Bob: The advisors going to beverage.

Bob: It has to be D C and also from an out on that allocation.

Bob: Resources, plus as well as.

Bob: Hum.

Bob: Deployment is about all of that is going to benefit and it has in the last.

Suhail Shaikh: All of that's going to benefit CDC. And it has in the last, say, few quarters. If you notice how the book has reshaped. That's all part and parcel of the strategy of doing it. So that step one, step two is obviously expanding the platform, which we are continuously doing, raising new capital, working on raising new capital.

Bob: Hey.

Bob: A few quarters.

Bob: Notice how the book has reshaped.

Bob: That's all.

Bob: Bought in Barcelona. This strategy of doing it. So that was that's step one step two is off to stay expanding the platform, which we.

Bob: Continuously doing raising new capital working on raising new capital at that time. So hopefully that gives you some sense of where we are.

Suhail Shaikh: So hopefully that gives you some sense of where we are, you know, we've done the stability, we've sort of stabilized the book, turned the book over, and now we're very focused on, as rightly you pointed out, on expenses and increasing NII every which way possible.

Bob: We've done this stability.

Bob: It's sort of stabilized above the buffer.

Bob: Now we're very focused on.

Speaker Change: As Greg pointed out expenses, and increasing NII every which way.

Bob: Possible.

Bob: Yeah.

Suhail Shaikh: Thanks for that. I mean, you have any kind of idea maybe into the runway for that whether it's on launches or just kind of the pace of capital raising that's going on. platform that might, you know, you might Cheryl might start to see some some benefit from that. 2025 sort of event, or it's going to be a longer one. Yeah, it's a 2025 event. We are currently in the process of raising another pool of capital. So that's live. And, you know, that's, and we're going, you know, that's underway. So it is the second half 2025 event.

Bob: Got it thanks for that I mean, do you have any kind of idea maybe into the wrong way.

Bob: Bad weather.

Bob: Our launches are just kind of a pace too.

Bob: Raising that's going on on the.

What form that might.

Bob: You might shareholders might start to see some benefit from that if you take that 2025.

Bob: So it's going to be a longer process.

Bob: Yeah, No. That's a funding 25 and then we are currently in the process of raising another pool of capital. So that's life and you know that.

Bob: Uh huh.

Bob: Underway.

Bob: So it adds a second half 2025.

Yeah.

Paul Johnson: Okay, thank you very much. That's all. Thank you.

Bob: Okay. Thank you very much that's all for me.

Speaker Change: Thank you and again, if you have any questions. Please press seven pound. Our next question comes from Mr. Christopher Nolan with Ladenburg Tallman go ahead yeah.

Operator: And again, if you have any questions, please press seven pound.

Christopher Nolan: Our next question comes from Mr. Christopher Nolan with Lattenberg Tallman. Go ahead. Yeah, hi, just following up on the questions.

Christopher Nolan: Yeah, Hi, just following up on the questions. When you said, you're raising capital you talk about equity.

Christopher Nolan: When you say you're raising capital, are you talking about equity or debt? Not for this vehicle, Christopher, we're raising capital for other vehicles, which will help and sort of expand the platform and have some overhead absorption. So that's equity capital that we're raising for. And, you know, I applaud your efforts to clear up the balance sheet and so forth.

Speaker Change: Our debt.

Christopher Nolan: Not for this vehicle.

Christopher Nolan: And we're raising capital for other vehicles, which will happen sort of expand the platform and have some overhead absorption. So that's equity capital raising.

Christopher Nolan: Uh huh.

Christopher Nolan: Yeah.

Christopher Nolan: And you know I applaud your efforts to clean up the balance sheet and so forth. What's your just do share repurchases at this point, given the dividend yield and everything else.

Suhail Shaikh: Why don't you just do share purchases at this point, given the dividend yield? You know, that's something we talk about, we won't take it off the table. There are no plans in place yet, but it's obviously a tool that we have and something we consider all the time.

Oh, that's something we talk about one check it off the table Oh plans in place and yeah. So.

Christopher Nolan: It's obviously a tool that we haven't.

Christopher Nolan:

Christopher Nolan: And something we consider all the time.

Christopher Nolan: But no I mean, your stock's trading at half book.

Suhail Shaikh: But no, I mean, your stock's trading at half a buck, your dividend yields above what your loans are, and you haven't even discussed it. Really? We have talked about it, we have not discussed it as a... as something that we would launch right now.

Speaker Change: Yields are above what your loans are and you haven't even discussed it.

Christopher Nolan: Really.

Christopher Nolan: We we have talked about it and we have not discussed yet.

Christopher Nolan: <unk>.

Christopher Nolan: As something that we would launch right now.

Christopher Nolan: Got it.

Suhail Shaikh: The non-accrual exits, congratulations on that.

Christopher Nolan: Non accrual exits.

Christopher Nolan: Actions on that shall we see a bump up and down.

Suhail Shaikh: Should we see a bump up in NII in the second quarter? You should. I mean, look, I think the big picture, the macro picture is that SOFA curve is coming down. And we are seeing some spread widening, and especially in the new opportunities that we're looking at, we're seeing about 25, 50 basis points spread widening. So you might see a little bit of an increase in NII, holding everything else constant, just from the deployment. But you know, as the curve comes down, it's being made up. So yields, on asset yields, they're gonna be relatively flat, at least for the time being.

Christopher Nolan: And in the second quarter.

Christopher Nolan: You should I mean look I think the big picture the macro picture is that cellphone com is coming down.

Christopher Nolan: And we are seeing some spread widening and especially in the new opportunities.

The two entities that were looking at were seeing about 25 to 50 basis points spread widening do you mean.

Christopher Nolan: I see no limit of the increase.

Christopher Nolan: And NII holding everything else constant just from and deployment.

Christopher Nolan: But it's.

Christopher Nolan: As the cost comes down it's being made up so use.

Christopher Nolan: On asset yields is that going to be relatively flat.

Christopher Nolan: Thanks for the time being.

Suhail Shaikh: As we go into the second half of the year Your guess is as good as mine as to what happens from a macro perspective in the economy. That's really going to drive where we see spreads. But from where we sit right now, we're starting to see about 25, 50 basis points of widening. uh...

Christopher Nolan: As we go into the second half yeah.

Christopher Nolan: Okay says aspirin as mine as to what.

Christopher Nolan: It happens from a macro perspective in the economy.

Christopher Nolan: That's really kind of drive the ABC spread spend from where we sit right now we're starting to see about 20.

Christopher Nolan: 25, 50 basis points of widening.

Christopher Nolan: on you Okay, thank you. Thank you very much.

Christopher Nolan: On your opportunities okay.

Christopher Nolan: Okay. Thank you.

Christopher Nolan: Thank you very much currently don't see any other questions.

Operator: I currently don't see any other questions.

Christopher Nolan: Right.

Walter Tsin: Well, thank you, everyone. And thank you again for the good questions. And we look forward to speaking to you again after the June quarter. Thank you, everyone.

Christopher Nolan: Well.

Christopher Nolan: Thank you everyone and thank you again for the good questions and we look forward to speaking to you again after the June quarter.

Christopher Nolan: Thank you everyone.

Christopher Nolan: Yeah.

Christopher Nolan: And this concludes today's conference call. Thank you everyone for attending.

Walter Tsin: And this concludes today's conference call. Thank you, everyone, for attending.

Christopher Nolan: Okay.

Christopher Nolan: Okay.

Christopher Nolan: Okay.