SLR Investment (SLRC) Q3 2026 Earnings Call Transcript

DATE

Wednesday, Nov. 4, 2026

CALL PARTICIPANTS

• Chairman and Co-CEO-Michael Stuart Gross
• Co-Chief Executive Officer-Bruce John Spohler
• Chief Financial Officer-Shiraz Y. Kajee

TAKEAWAYS

• Net Investment Income -- $17.8 million, or $0.33 per share, which covered the quarterly distribution of $0.31 per share.
• Net Asset Value -- $17.83 per share, reflecting a sequential decrease of 90 basis points primarily driven by the fair value decline of a single investment on nonaccrual status.
• Originations -- $575.1 million for the third quarter, representing a company record with 95% of the volume directed toward specialty finance strategies.
• Repayments -- $429.2 million, resulting in net originations of approximately $145.9 million for the quarter.
• Net Debt-to-Equity -- 1.1x, remaining within the company's target leverage range of 0.9x to 1.25x.
• Available Capital -- Over $850 million, including capacity from available credit facilities and specialty finance portfolio companies.
• Asset-Based Lending Portfolio -- $1.5 billion across 241 issuers, accounting for over 43% of the total comprehensive portfolio with a weighted average asset-level yield of 12.6%.
• Equipment Finance Portfolio -- $1.2 billion across 570 borrowers, representing 35.5% of the comprehensive portfolio with a 10.2% weighted average yield.
• Sponsor Finance Portfolio -- $463 million across 25 borrowers, which consists entirely of first-lien investments and maintains a weighted average interest coverage of 2.2x.
• Life Science Finance Portfolio -- $175.7 million across six borrowers, representing 5.2% of the comprehensive portfolio with a weighted average yield of 9.8%.
• Nonaccruals -- Two investments representing 1.2% of the portfolio at fair value and 2.9% at cost.
• Portfolio Composition -- 97.5% of the comprehensive portfolio is invested in senior secured loans, with 96.4% held in first-lien senior secured loans.
• SSLP Performance -- $1.3 million in earnings for the quarter, reflecting an 11% annualized yield on the cost basis of the investment.
• Unsecured Debt Issuance -- $135 million in notes committed on Oct. 28, 2026, featuring a fixed interest rate of 6.76% and a maturity date in June 2030.
• Stock Repurchases -- 884,002 shares purchased for $10 million at an average price of $11.31 per share between Oct. 1, 2026, and Oct. 30, 2026.
• Asset-Backed Securitization -- $250 million facility closed by the equipment finance team at a fixed rate of 5.6% to lower the cost of debt capital.
• Watch List -- 2% of the portfolio at fair value, which management noted is below the long-term average of 2.2%.
• Software Industry Exposure -- Less than 1% of fair value, comprising only two borrowers in the portfolio.
• Payment-in-Kind Income -- 2% of gross income, resulting from restructured interest following loan amendments.
• Shared Investment Overlap -- Less than 20% with other public business development companies, providing diversification relative to industry peers.

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RISKS

• Gross warned that "Fitch ratings recently indicated that the trailing 12-month default rate is the highest on record as of the end of the third quarter," suggesting increasing pressure across the private credit industry.
• Gross stated, "We expect defaults and liability management exercises to rise throughout the next year," noting that weaker documentation and unitranche structures may lead to higher loss rates for lenders.

SUMMARY

SLR Investment Corp. (NASDAQ:SLRC) reported third quarter results characterized by record originations and stable net investment income that fully supported its dividend. Management reported a strategic focus on specialty finance, with 95% of the $575.1 million in new investments allocated to collateral-based lending rather than traditional cash flow loans. The company maintained a conservative leverage profile at 1.1x net debt-to-equity and reported significant liquidity with over $850 million in available capital. While net asset value per share declined slightly to $17.83 due to the performance of a single nonaccrual loan, the company noted that its broader portfolio remains healthy with limited exposure to cyclical 2021 and 2022 vintages. Additionally, the firm utilized its stock repurchase program to acquire $10 million in shares post-quarter end, which is expected to be accretive to future net asset value per share.

• Management reported a more cautious view of the credit cycle, with Gross stating, "Markets firmly expect risk-free rates to remain higher for longer."
• The company is utilizing asset-based lending teams as a countercyclical sourcing engine, noting that sponsors of capital structures that cannot refinance in traditional markets are seeking liquidity solutions.
• Spohler noted the unique nature of the portfolio, stating, "Our shared investment exposure with other BDCs represents less than 20% of our portfolio."
• The firm recently finalized a partnership with a super regional bank that has already begun to generate referral opportunities for the specialty finance segments.
• Management indicated that less than 15% of the comprehensive portfolio is invested in the 2021 and 2022 vintages, which are currently facing higher stress due to leverage and interest rate environments.
• The equipment finance segment successfully completed a $250 million asset-backed securitization at a fixed rate of 5.6% to optimize the company's capital structure.

INDUSTRY GLOSSARY

• ABL (Asset-Based Lending): Loans secured by specific collateral such as accounts receivable, inventory, or equipment.
• BDC (Business Development Company): A form of closed-end investment company that invests in small and mid-sized businesses.
• EBITDA: Earnings before interest, taxes, depreciation, and amortization; a measure of a company's operating performance.
• LTV (Loan-to-Value): A ratio that measures the amount of a loan compared to the value of the asset securing it.
• NAV (Net Asset Value): The total value of an entity's assets minus its total liabilities, often expressed on a per-share basis.
• NII (Net Investment Income): The amount of income generated from investments after operating expenses.
• PIK (Payment-in-Kind): Interest or dividends paid in the form of additional debt or equity rather than cash.
• SSLP (SLR Senior Lending Program): A joint venture program managed by SLR Investment Corp. to invest in senior secured loans.

Full Conference Call Transcript

Operator: Thank you for your continued patience. Your meeting will begin shortly. Team will be happy to assist. Please stand by. Your meeting is about to begin. Hello, and welcome everyone joining today's Q3 26 SLR Investment Corp. Earnings Call. At this time, all participants are in a listen only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. Please note this call is being recorded. It is now my pleasure to turn the meeting over to Michael Stuart Gross, Chairman and Co-CEO. Please go ahead.

Michael Stuart Gross: Thank you very much, and good morning. Welcome to SLR Investment Corp. earnings call for the quarter ended 09/30/2026. I am joined today by my long-term partner, Bruce Spohler, our Co-Chief Executive Officer, as well as Chief Financial Officer, Shiraz Y. Kajee. And members of the Solar Investor Relations team. Shiraz, before we begin, would you please start by covering the webcast and forward-looking statements?

Shiraz Y. Kajee: Thank you, Michael. Good morning, everyone. I would like to remind everyone that today's call and webcast are being recorded. Please note that they are the property of SLR Investment Corp. and that any unauthorized broadcast in any form is strictly prohibited. This conference call is also being webcast on the Events Calendar in the Investor section on our website at www.slrinvestmentcorp.com. Audio replays of this call will be made available later today as disclosed in our November 3 earnings press release. I would also like to call your attention to the customary disclosures in our press release regarding forward-looking statements. Today's conference call and webcast may include forward-looking statements and projections.

These statements are not guarantees of our future performance or financial results and involve a number of risks and uncertainties. Past performance is not indicative of future results. Actual results may differ materially as a result of a number of factors, including those described from time to time in our filings with the SEC. We do not undertake to update any forward-looking statements unless required to do so by law. To obtain copies of our latest SEC filings, please visit our website or call us at (212) 993-1.67 thousand. At this time, I would like to turn the call back over to our Chairman and Co-CEO, Michael Stuart Gross.

Michael Stuart Gross: Thank you, Shiraz, and thank you to everyone for joining our earnings call this morning. Markets firmly expect risk-free rates to remain higher for longer. AI and the new economy build-out dramatically impact capital flows, commerce, and ultimately risk. As a result, questions about where we are on the credit cycle have grown louder throughout the year. Expectations for interest coverage and direct lending facilities are moderating. We first expressed a more cautious view about the potential for rising private credit losses late last year. That view rested on our 20-plus history of managing private credit vehicles and recognizing that the industry was approaching the middle stages of a credit cycle.

We believe these signs can no longer be dismissed. They are clearly visible through the lens of rising defaults and realized losses. The simple average net asset value per share has declined more than 5% for public BDCs year to date and Fitch ratings recently indicated that the trailing 12-month default rate is the highest on record as of the end of the third quarter. Against this backdrop, we continue to believe investors are looking for private credit portfolios that are less exposed to areas of private credit exuberance during the past 5 years. We believe our comprehensive portfolio of largely commercial finance asset-positioned assets positions us to provide durable current income and total return.

We think the strength of our portfolio today reflects how we structure and select investments not where we sit in the current cycle or the amount of capital we need to deploy. Many of today's market participants have never underwritten through a true downturn, as rapid capital formation loosened cash flow underwriting as non-listed BDCs grew into tens of billions of dollars under management in a very short period. The stress was concentrated in the 2021 and 2022 vintages underwritten at high leverage in the low interest rate environment and are now facing a large wave of cyclicals and software loan maturities. Importantly, less than 15% of our comprehensive portfolio is invested in these vintages.

Floating rate direct lending would normally benefit from an increase in base rates. But higher financing costs, margin compression and rising credit losses are thus far offsetting this tailwind. Continued lackluster M&A activity and excess supply of capital further won the supply-demand imbalance and extend the highly competitive environment for good cash flow assets. As a result, sourcing good risk return and sponsor finance remains challenging. We expect defaults and liability management exercises to rise throughout the next year. This is a typical credit cycle downturn. Not a crisis, a la 2008. However, we believe that defaults will be higher than many expect.

Weaker documentation and unitranche structures that sit deeper in the capital structure leave less cushion beneath lenders, so loss given default rates could run higher than many assume. The current environment favors experienced collateral based lenders as sponsors of capital structures that cannot refinance in the traditional market need liquidity and working capital solutions. Our portfolio is built for this environment. It primarily consists of first lien loans against collateral that we can monitor and liquidate selective cash flow exposure and a small watch list. Our ABL teams are a countercyclical sourcing engine when liquidity and capital are scarce. In this market phase, credit dispersion is expected to widen and manager and asset selection will matter more.

We will stay disciplined and are prepared for either a typical downturn or a more benign outcome. Nearly all of our originations in the third quarter were in specialty finance. And we expect that focus to continue for the foreseeable future. Turning to our Q3 results. For the third quarter, SLRC reported net investment income or NII of $0.33 per share against a distribution of $0.31 per share. At September 30, the company had a net asset value per share of $17.83 down approximately 90 basis points in the prior quarter and down only 2.1% year over year. Which is less than half the industry experience.

The NAV decline in Q3 was driven by the decline in fair value of 1 loan on non accrual. Bruce will provide more detail on this investment. Importantly, this investment's challenges are idiosyncratic. And not reflective of our broader portfolio's health. In fact, our watch list declined this quarter with only 2% of our portfolio at fair value in that category. Continue to have strong conviction in the credit quality of our portfolio. Consistent with the prior quarter, our exposure to software industry consisting of only 2 borrowers stands at less than 1% of fair value. Furthermore, only 2% of our gross income is derived from restructured PIC. Both portfolio metrics remain well below private credit portfolio averages.

With our conservatively positioned portfolio, we are focused on investment opportunities in asset based lending. During the third quarter, SLRC originated $575 million of new investments across the comprehensive portfolio. This volume, weighted 95% to specialty finance represents a record for SLRC. And highlights our ability to originate attractive investments during periods of muted activity in the traditional direct lending market. During the third quarter, we received repayments of $429 million for net originations of approximately $146 million. We view this level of portfolio churn favorably. As the repayments represented successful realizations at par or better and the associated prepayment exit fees add a further source of income.

We continue to have a robust specialty finance pipeline fueled by our ABL team's broad geographic footprint resulting in strong traction in local markets and increasing sponsor interest in ABL solutions. With our strategic focus on specialty finance, we are executing growth strategies to expand our footprint through new hires, acquisitions and investment sourcing partnerships. A recently finalized partnership with a super regional bank has begun to produce referral opportunities. As the partnership progresses, we will share more details. Remain active in the cash flow market in our core industry, healthcare and are ready to pivot to this asset class if it becomes more attractive.

September 30, including available credit facility capacity at SSLP, and our specialty finance portfolio companies SLRC had over $850 million of available capital to deploy subject to borrowing base limits. Our liquidity portfolio and minimal watch list position us to deploy capital as the cycle turns whether it means stepping in as banks pull back or meeting sponsors' needs for liquidity. I will turn the call back over to Shiraz, our CFO, to take you through third quarter financial highlights.

Shiraz Y. Kajee: Thank you, Michael. SLR Investment Corp. Net asset value at 09/30/2026 was $972.8 million or $17.83 per share compared to $18 per share at June 30, 2026. At quarter end, SLRC's on balance sheet investment portfolio had a fair value of approximately $2 billion in 77 portfolio companies. Compared to a fair value of $2.1 billion in 79 portfolio companies at June 30. Our investment portfolio continues to be funded by a combination of our multi lender revolving credit facilities, and the issuance of term debt in the unsecured debt markets to institutional investors. Company's investment grade rated by Fitch, Moody's and DBRS. Over 43% of the company's debt capital is comprised of unsecured debt as of September 30.

At September 30, the company had approximately $1.1 billion of debt outstanding with a net debt to equity ratio of 1.1x within our target range of 0.9x to 1.25x. We have ample liquidity to fund our unfunded commitments and for future portfolio growth. Looking forward, the company has unsecured debt maturities of $75 million in December 2026, $135 million in January 2027, and $50 million in March 2027. On October 28, the company committed to a private offering of $135 million of unsecured notes with a fixed interest rate of 6.76% and a maturity date of 06/10/2030. This issuance is anticipated to close and fund on 12/10/2026.

We expect to continue to prudently access the debt capital markets and issue unsecured debt as and when needed. Moving to the P and L. For the 3 months ended September 30, gross investment income totaled $49.3 million versus $48.8 million for the 3 months ended June 30, Net expenses totaled $31.5 million for the 3 months ended September 30, This compares to $31.1 million for the June quarter. Accordingly, the company's net investment income for the 3 months ended 09/30/2026, totaled $17.8 million or $0.33 per average share. In line with prior quarter.

Below the line, the company had net realized and unrealized losses of $10.2 million in the third quarter versus net realized and unrealized losses of $9.5 million for the second quarter of 2026. As a result, the company had a net increase in net assets from operations of $7.6 million for the 3 months ended September 30, compared to a net increase of $8.3 million for the 3 months ended June 30, Post quarter end, the company purchased over 884 thousand shares of SRC at an average price of $11.31 inclusive of commissions. These purchases totaled $10 million and were executed through our 10b5-1 stock repurchase plan previously authorized by our Board of Directors.

We expect these purchases to be accretive to NAV per share in the fourth quarter. On 11/03/2026, the Board of Directors declared a quarterly distribution of $0.31 per share payable on 12/28/2026, to holders of record as of 12/14/2026. With that, I will turn the call over to our Co-CEO, Bruce John Spohler.

Bruce John Spohler: Thank you, Shiraz. Before discussing our portfolio, let me comment on our specialty finance strategies. Those were typically the sole lender in our specialty finance strategies The majority of our exposure is unique to SLRC. Consequently, our investment portfolio overlap with other public BDC portfolios is 1 of the lowest in the industry. According to a Q2 2026 research report, our shared investment exposure with other BDCs represents less than 20% of our portfolio. This compares to a weighted average overlap of more than 50% for many of our peers. This provides our investors with greater diversification across their holdings.

Both the low correlation to other managers as well as to other asset classes as well as the strong downside protection through our collateral coverage make our specialty finance strategies an attractive value proposition. Our investment strategies are extremely high touch with deep expertise and experience are a prerequisite for both the underwriting as well as for the active monitoring of collateral throughout our loan's life. These strategies are not conducive to manager tourism. And take, in our view, at least a decade to build. from the ground up. Because of this, competition remains limited which preserves our ability to generate alpha at a time that mainstream direct lending is evolving into a beta asset class.

Now let me turn to the portfolio. At quarter end, the comprehensive portfolio was approximately $3.4 billion, with an average exposure of $4 million. At fair value, approximately 97.5% of our portfolio consisted of senior secured loans, with over 96% invested in first lien loans. The 1% of our portfolio in second lien investments consists entirely of asset based loans, which contain borrowing bases and no second-lien cash flow loans. At quarter end, more than 86% of the portfolio is comprised of specialty finance investments. At quarter end, the weighted average asset level yield on the portfolio was 11.2%. Up slightly from last quarter and consistent with the past year's performance.

Overall, we believe the portfolio has been less impacted by changes in base rates and spread compression compared to the BDC peer group due to our higher allocation to specialty finance loans. We continue to have just 2 loans on non-accrual, with 1 of those accounting for the decline in our NAV of 90 bps this quarter. This investment is OmniGuide. Our workout team is actively focused on maximizing our recovery for both OmniGuide and our other non-performing loan. Outside of these 2 investments, which account for the majority of our watch list, our portfolio continues to perform well. At quarter end, the weighted average investment risk rating was under a 2, based on our 1-to-4 risk rating scale.

With 1 representing the least amount of risk. Approximately 98% of the portfolio is rated a 1 or 2 at quarter end. Outside of our 2 non-accruals, which represent 1.2% of the portfolio at fair value and 2.9% at cost. Our portfolio companies continue to exhibit healthy business fundamentals and perform at or above expectations. In addition, 2% of our gross income is derived from PIK interest that resulted from amendments. Now let me touch on each of our 4 investment verticals. Starting with our Specialty Finance segments.

In asset-based lending, our teams are extremely active with an expanded opportunity set consisting of their traditional borrowing base clients as well as increasing interest from our sponsor finance clients. are seeking incremental liquidity through ABL solutions for their portfolio companies. Private equity firms are increasingly using ABL structures to supplement the financing of LBOs, strategic acquisitions as well as for turnaround asset purchases. In particular, we are seeing traction with healthcare sponsors, given our understanding of complex healthcare-related accounts receivable. The SLR team has been financing healthcare receivables for over 30 years and understands the reimbursement nuances of healthcare accounts receivable.

This asset level diligence is often what separates a lender capable of structuring around complexity from 1 that simply lacks the decades of experience with healthcare accounts receivable collectability. Our priority remains a first lien position on liquid current assets predominantly accounts receivable and inventory, which has historically minimized our risk exposure. At quarter end, our ABL platform totaled $1.5 billion across 241 issuers representing more than 43% of the total portfolio. For the third quarter, we originated $277 million of new ABL investments, and had repayments of $238 million Weighted average asset level yield on the ABL portfolio was 12.6%, up from 12% the prior quarter.

We are continuing to advance partnership opportunities as well as evaluate strategic transactions such as portfolio and business acquisitions. Additionally, we are continuing to expand the origination team across our ABL verticals. Let me touch on equipment finance. We are pleased with the progress across our equipment finance businesses and have seen an increase in demand for equipment financings more broadly. Which resulted in portfolio growth this quarter as well as a larger pipeline as we head into year end.

The opportunity set includes equipment leasing opportunities related to the infrastructure build-out of the digital economy as well as the greater need for financings for companies in traditional industries, as many of our peer lenders turn their focus solely to data center financings. At quarter end, the equipment finance portfolio totaled $1.2 billion, representing approximately 35% of our total portfolio and was highly diversified across 570 borrowers. Credit profile of this portfolio was stable quarter over quarter. During the third quarter, we originated $263 million of new investments and had repayments of approximately $176 million. Weighted average asset-level yield for this portfolio was 10.2%. Our investment pipeline has expanded in Equipment Finance.

Additionally, we are continuing to see demand from existing borrowers seeking to extend their existing leases on equipment rather than buying new equipment at higher tariff-adjusted prices. Also achieved during the quarter was an important marker for our SLR Equipment Finance team. We were able to finance the portfolio with a $250 million asset-backed securitization. This facility lowered the company's cost of debt capital pricing at a fixed rate of 5.6%. Now let me turn to Life Sciences. Our life science team continues to evaluate new opportunities.

In response to the challenging conditions in this segment, our team is focused on larger companies that can benefit from comprehensive solutions involving not only life science loans but also ABL revolvers and royalty structures. Our platform has a unique competitive advantage in its ability to offer this full suite of products, which is bolstering our pipeline. During the third quarter, we had originations of $5 million and no repayments in Life Sciences. At quarter end, the portfolio was $176 million across 6 different borrowers, representing 5% of the total portfolio. Activity has increased, and we are optimistic about our pipeline heading into next year. Cash flow lending.

With muted M&A activity and large capital inflows for the largest private credit managers, cash flow lending has remained a competitive market. Where the risk premium has narrowed. SLRC currently takes an opportunistic approach to this asset class. Our broad platform expertise in healthcare enables us to continue to serve as a valuable cash flow loan provider to companies in this industry during periods of overheated market conditions. Sponsors have been focused on troubled portfolio companies and amend and extend executions with the looming 2027 and 2020 maturing maturity wall approaching. At quarter end, our sponsor finance cash flow portfolio totaled $463 million across 25 borrowers, or just under 14% of the total portfolio.

Our software exposure accounts for less than 1%. The weighted average EBITDA of the portfolio was approximately $117 million. 100% of this portfolio was first-lien investments, and we had a weighted-average LTV of just under 40%. Our borrower fundamentals remain strong. Single-digit growth in average year-over-year revenue and EBITDA. Weighted average interest coverage on our cash flow portfolio was 2.2x, consistent over the past year. For the quarter, we made investments of $30 million and experienced repayments of $15 million. At quarter end, our weighted average cash flow yield was just under 10% compared to 9.6% last quarter. Now let me touch on our SSLP.

For the quarter, during the quarter, we invested $7 million and had approximately $10 million of repayments. Our net leverage is just around 0.9x. Company earned $1.3 million from its investment in SSLP during the quarter, which represented an annualized yield of 11% compared to 11.8% in Q2. At quarter end, it has $62 million of undrawn debt capacity. We expect to grow this portfolio opportunistically as conditions in the sponsor finance market warrant. Let me turn the call back to Michael.

Michael Stuart Gross: Thank you, Bruce. In conclusion, at this stage of the credit cycle, with risk not being rewarded as it once was in the direct lending market, we are staying focused on our specialty finance strategies. These collateral based loans make up the vast majority of our recent originations, provide the underpinnings of the stability and solid credit quality of our portfolio. We feel confident in the health of our overall performance and believe we are well positioned to weather this higher for longer interest rate environment. While we are comfortable with our portfolio's current earnings power, given our conservative investment approach, particularly in today's market, we are pleased with the specialty finance teams traction.

As issuers facing liquidity challenges seek alternative sources of capital, our broad range of solutions are being well received. Our teams thrive in challenging markets and our portfolio's stable credit quality enable them to remain focused on the opportunity set. The SLR team owns more than 9% of the company's stock today as a significant percentage of the annual incentive compensation invested in SLR stock each year. Including purchase of stock that took place in the first quarter. We thank you again for your time today, especially on a busy day of BDC earnings releases. Operator, please open the line for questions?

Operator: Thank you. We will take our first question from Erik Zwick with B. Riley Capital Markets. Please go ahead. Your line is open.

Eric Zwick: Thank you. Good morning, everyone. Understanding that your portfolio structure makes the yield less sensitive to changes in interest rates. Is there anything else that could lead to any changes in the portfolio going forward? Anything in terms of changes in spreads or portfolio mix shift that we could see any changes in the next, say, quarter or 2?

Bruce John Spohler: I think while we are not highly correlated to base rates, in the near term, we do benefit in our specialty finance strategies from the pickup in base rates. So at some point, it gets too high. And so we will not see that pass through to our returns. But I think in the next quarter or 2, you will see the pickup just as you would in a cash flow deal. In terms of that additional increase in base rate yield.

Eric Zwick: Thanks. And then kind of transitioning to the asset based lending strategies. We have seen a little bit of tick up in inflation. In some of the measures that is going to be sustained, I think, is still out for debate. But can you just talk about the considerations that you need to kind of monitor and take into account as you continue to both monitor the existing ABL portfolio as well as newer originations and how a higher inflationary environment could impact that management style?

Bruce John Spohler: that is a great question. The good news is we have got several hundred investments across borrowers throughout The U.S. in a variety of industries. So we have a very good lens. Into the underlying performance of the U.S. economy. What we would say is because we have such insight, we do get, as you may know, information around receivable turns, inventory turns on a weekly and monthly basis. So we have a lot of inputs. I think the thing that we are most focused on in the ABL portfolio because we benefit from underlying collateral, we are really looking for liquidity. and the sense of a company's liquidity.

How is inflation and increased borrowing costs impacting their liquidity profile? that is the first thing that we are very, very focused on to make sure that they have a long runway to support the business during this inflationary period. And again, we benefit from very quick and deep insights into those impacts on a weekly to monthly basis.

Eric Zwick: that is helpful. And then last 1 for me. With regards to the end of October, offering of $135 million, that. that is more than enough to, cover your upcoming maturity of $75 million. So should we read that as a kind of optimistic, offering raise in terms of your ability to execute on the pipeline and continue to grow the portfolio?

Bruce John Spohler: Yes. I think we will be, as we have been, for the last 20 years, been opportunistic as we go to the private placement market to Shiraz's comments. We would like to be able to go when it is appropriate rather than at a position of need. So we are, yes, to your question, resetting the cap stack You have seen us over time increase the size of our revolver as well. To take advantage of what we see to be a continued strong pipeline in specialty finance investments.

Eric Zwick: Thank you for taking my questions.

Operator: Thank you. We will move next with Jason Stewart. With Compass Point. Please go ahead.

Jason Stewart: Hey, good morning. Thanks for taking my question. Dylan Ritter filling in for Jason here. Question is, how did you determine the appropriate level of share repurchases in October? And what made that level attractive from a capital allocation standpoint? Looking ahead, is there specific price level or metric where you would favor over deploying capital into new investments?

Michael Stuart Gross: Okay. I think we always view the $50 million plan we put in place as opportunistic. It was meant to last a year. Since we have a long time left on it. We will continue to look at it opportunistically. In the lower levels, it seemed very attractive. In the mid-12s, it is less attractive given our investment opportunity is at. So, we will continue to watch it opportunistically. And we will see what happens.

Jason Stewart: Got it. Thank you.

Operator: Thank you. We will move next with Heli Sheth with Raymond James. Please go ahead.

Analyst: Good morning. Thanks for the question. So following up on asset based financing, we have kind of seen a rise in the space in ABS and just more opportunities there. How landscape-changing is this for the space?

Bruce John Spohler: So if what you are alluding to is the fact that there is been a lot of talk and activity in ABS and ABF and a lot of the larger fund complexes entering the space. What we are seeing is they are going after parts of the market that are dramatically different from what we do. For the most part where you are seeing activity is in consumer based products whether it is portfolios of student loans, car loans, credit card receivables, or mortgages, you can put large packs together and repackage them and distribute them. it is very different from what we do. Everything we do in the asset-based lending world is truly about direct lending.

Where we are directly originating to a counterparty, we are directly underwriting it and we are directly monitoring it. So, the activity we are seeing from these bigger players really has had little or no impact on what we do. And the competitive landscape of what we do really has not changed at all.

Analyst: Got it. that is helpful. And being that you guys have been in the ABF space for so much longer and are the leaders and the experts in the area. We have kind of seen in other areas such as venture lending. New entrants with poor execution can still cause years of disruption to a space. Is there any cause for concern about new entrants into the space and how much of that is a negative prospect to deploying capital for you?

Michael Stuart Gross: That is a great question. For example, we actually saw that our life science strategy. We saw some new entrants come in who thought they had the expertise they bid on a bunch of deals and got them, and they did not work out so well. The big difference though is that to go into the receivable financing facilities or credit card credit card receivables or inventory facilities you cannot just raise your hand and say you want to be in it. You have to have the infrastructure in place. To put a facility in place and manage it. So it is very difficult for tourists to come in and out of the business.

Bruce alluded to earlier, you have to have spent 15 years building out the infrastructure to do it. No borrower is going to take money from an asset based lender who does not have the ability to kind of execute.

Bruce John Spohler: Just to put a finer point on that, we have over 200 people in 20 offices around the country focused on sourcing and then monitoring collateral. That is, to Michael's point, a huge barrier to entry.

Analyst: Got it. Thanks for the color. Appreciate it.

Operator: Thank you. And at this time, I will turn the meeting back to Michael Stuart Gross for closing comments.

Michael Stuart Gross: Thank you. At this time, we do not have any more comments. Other than to thank you for your participation today. And to reiterate that if any of you or anyone else has any questions, please feel free to reach out to any of us. We will be happy to talk. Have a great day. Thank you.

Operator: This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

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