Oct 7, 2026 earnings call — Record AUM and capital refinancing
AUM reached a record $1.15 billion, up 2.1% during the quarter.
Revenue $0.0B (est $0.0B) · EPS $0.46 (est $0.49)
Key quotes
"Subsequent to quarter end, we issued a further $23.1 million SAX baby bonds through a reopening, bringing the total principal amount issued to approximately $120.8 million."
"We, therefore, have no nonaccruals today within our portfolio."
"Originations and AUM growth during the quarter contributed to adjusted NII of $0.46 per share compared to $0.47 per share last quarter."
Analyst Q&A 4
spillover, dividend path, deal sourcing
Q (Erik Zwick · Lucid): He asked the spillover per share at quarter end. He also asked whether the 4–5 quarter path to bridge NII and the dividend still seems achievable and how they weigh keeping the dividend versus NAV stability, and why current term sheets favor PE sponsors.
A: Management said spillover was down to about $1 per share as of 8/31. They said the liability side of the balance sheet rose faster than assets but asset spreads are starting to widen and the portfolio looks solid, with no nonaccruals; the SBIC incremental $75 million and the CLO reset help reduce refinancing risk. They added that private equity sponsors give extra credit support, capital and more efficient sourcing, which is why many current term sheets are sponsor-backed.
"So as of the end of August, our spillover that has been reducing is down to about $1 per share as of 8/31." — Henri Steenkamp
share buybacks, leverage, CLO fees
Q (Jason Stewart · Compass Point): He asked how management thinks about share repurchases given the stock price and balance-sheet leverage, and whether rating agencies look at leverage structure or just the number. He also asked how CLO management fees work during ramp and how they will ramp back up.
A: They said buybacks reduce equity and increase leverage, so they balance repurchases against higher leverage; at current discounts modest repurchases can be attractive and they recently repurchased about 9% of shares. They said rating agencies look at multiple metrics and the structure of debt matters; the CLO pays 50 basis points on average assets, they will be back in compliance after the refinance and will earn full fees on $350 million, which they estimated will be about $450,000 per quarter, plus interest income from the subordinated note and the E-Note.
"I think it's around $450,000 on a quarterly basis, obviously, down from previously because it was a $650 million CLO at that point in time, but up then significantly from what you've seen in the last couple of quarters." — Henri Steenkamp
SBIC eligibility and use of capital
Q (Christopher Nolan · Ladenburg Thalmann & Company): He asked what percent of deal flow is SBIC eligible, whether most incremental deals will go to the SBIC in the next quarters, and if they can get additional SBIC licenses under rule changes.
A: They said about 85% to 90% of the deals they see are SBIC eligible. They said yes, SBIC debt is the cheapest capital and will be used first as cash is deployed, and the licensing process is sequential: first use the upsized program and later pursue new licensing, but there is no update yet on additional licenses.
"But from the actual deals that we see, probably about 85% to 90% of all the deals we see are SBIC eligible." — Henri Steenkamp
software borrowers and AI impact
Q (Erik Zwick · Lucid): He asked whether the problems at Madison Logic and Chronus (customer nonrenewals and slower new customer wins) are related to AI or other factors.
A: They said Chronus continues to incorporate AI into its products and they have not seen a meaningful negative competitive impact; AI has been accretive for Chronus. For Madison Logic the issues are related to demand generation in display services for B2B marketers, not AI; they monitor AI's impact across all borrowers.
"Taking them in turn, from a Chronus perspective, AI continues to actually be incorporated into their products." — David DeSantis (COO)