NASDAQ:CCAP Crescent Capital BDC Q1 2024 Earnings Report $16.07 +0.09 (+0.56%) Closing price 04/25/2025 04:00 PM EasternExtended Trading$16.08 +0.01 (+0.06%) As of 04/25/2025 04:05 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Crescent Capital BDC EPS ResultsActual EPS$0.63Consensus EPS $0.59Beat/MissBeat by +$0.04One Year Ago EPSN/ACrescent Capital BDC Revenue ResultsActual Revenue$50.36 millionExpected Revenue$48.31 millionBeat/MissBeat by +$2.05 millionYoY Revenue GrowthN/ACrescent Capital BDC Announcement DetailsQuarterQ1 2024Date5/8/2024TimeN/AConference Call DateThursday, May 9, 2024Conference Call Time12:00PM ETUpcoming EarningsCrescent Capital BDC's Q1 2025 earnings is scheduled for Tuesday, May 6, 2025Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Crescent Capital BDC Q1 2024 Earnings Call TranscriptProvided by QuartrMay 9, 2024 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Good day, everyone, and welcome to today's Crescent Capital BDC, Inc. 1st Quarter Earnings Call. At this time, all participants are in a listen only mode. Later, you will have an opportunity to ask questions during the question and answer session. Please note this call is being recorded. Operator00:00:21And it is now my pleasure to turn today's call over to Dan McMahon, Head of Investor Relations. Please go ahead. Speaker 100:00:28Good morning, and welcome to Crescent Capital BDC, Inc. Q1 ended March 31, 2024 Earnings Conference Call. Please note that Crescent Capital BDC Inc. May be referred to as CCAP, Crescent BDC or the company throughout the call. Before we begin, I'll start with some important reminders. Speaker 100:00:47Comments made over the course of this conference call and webcast may contain forward looking statements and are subject to risks and uncertainties. The company's actual results could differ materially from those expressed in such forward looking statements for any reason, including those listed in its SEC filings. The company assumes no obligation to update any such forward looking statements. Please also note that past performance or market information is not a guarantee of future results. Yesterday, after the market closed, the company issued its earnings press release for the Q1 ended March 31, 2024 and posted a presentation to the IR section of its website at crescentbdc.com. Speaker 100:01:27Presentation should be reviewed in conjunction with company's Form 10 Q filed yesterday with the SEC. As a reminder, this call is being recorded for replay purposes. Speaking on today's call will be CCAP's Chief Executive Officer, Jason Breaux President, Henry Chiang and Chief Financial Officer, Gerhard Lombard. With that, I'd now like to turn it over to Jason. Speaker 200:01:50Thank you, Dan. Hello, everyone, and thank you all for joining us today. We're very pleased to report another record quarter of earnings with continued strong credit performance across the portfolio. Net investment income or NII was $0.63 per share, up $0.02 from last quarter. Our NII has increased in each of the past 5 quarters, resulting in record NII for the 5th consecutive quarter. Speaker 200:02:17This quarter's earnings translated into an annualized NII return on equity of 12.6%. With our earnings well in excess of the regular dividend, our Board has declared a supplemental dividend for the Q1 of $0.11 per share, which when coupled with our previously declared regular dividend of $0.41 per share equates to a 10.3% annualized dividend yield on March 31, 2024 NAV. We've demonstrated meaningful earnings in excess of our base dividend over the last several quarters. In response, we implemented a supplemental dividend policy in the Q1 of 2023 to share additional earnings upside with our stockholders in the form of increased distributions. This was in light of our view that earning the base dividend has always been a key part of the CCAP story. Speaker 200:03:08We've never cut it and we've paid the current base dividend of $0.41 for 22 consecutive quarters. Reflecting confidence in both the sustainability of CCAP's NII and the continued strong credit performance of our portfolio, we are pleased to announce that our Board recently approved a $0.01 increase to our regular dividend, increasing the 2nd quarter regular dividend to $0.42 per share. What underpins this increase in our base dividend is our conviction in CCAP's longer term earnings power. Having reviewed firsthand the impact of a higher rate environment on our portfolio and the origination opportunities in our private credit pipeline, we are bullish on CCAP's longer term ability to continue its track record of earning its regular dividend. We also note that we have benefited from managing and monitoring the loans that we acquired from First Eagle BDC for over a year now and believe that the earnings from the current assets as well as the loans that we expect to rotate into will continue to be attractive for CCAP's longer term earnings profile. Speaker 200:04:15The strength of our earnings and the positive valuation momentum in our portfolio also led to growth in our net asset value, which increased 1.2% in the quarter and 4.6% year over year to $20.28 per share, which is the highest it has been since June 2022. Net income per share was $0.76 in the first quarter, corresponding to an annualized ROE of 15.2%. Let's shift gears. Please turn to Slides 13 and 14 of the presentation, which highlights certain characteristics of our portfolio. We ended the quarter with approximately $1,600,000,000 of investments at fair value across a highly diversified portfolio of 183 companies with an average investment size of approximately 0.5% of the total portfolio. Speaker 200:05:11We've deliberately maintained an investment portfolio that consists primarily of senior secured 1st lien and unitranche 1st lien loans, collectively representing 90% of the portfolio at fair value at quarter end, up modestly from the prior quarter. This speaks to our continued focus on maintaining a defensively positioned portfolio with greater downside protection and lower risk of loss compared to portfolios with greater second lien and subordinated debt exposure. We have focused our investing efforts on non cyclical industries with high free cash flow characteristics and remain well diversified across 20 broad industry categorizations. Our investments are almost entirely supported by well capitalized private equity sponsors with 98% of our debt portfolio in sponsor backed companies as of quarter end. We've been pleased with the fundamental performance of our portfolio as indicated by our performance ratings and non accrual levels. Speaker 200:06:10Our weighted average portfolio grade of 2.1 remained stable quarter over quarter. And on Slide 17, you will see that the percentage of risk rated 12 investments, the highest ratings our portfolio companies can receive, accounted for 89% of the portfolio at fair value, an improvement from 87% at year end. As of quarter end, we had investments in 7 portfolio companies on non accrual status, representing 1.6% and 0.9% of our total debt investments at cost and fair value, respectively. This compares to 9 portfolio companies on non accrual status, representing 2.0% of total debt investments at cost as of year end, as our position in Matilda Jane, our First Eagle name, was realized above our acquired cost basis and Integro was removed from non accrual status. As previously noted, we are pleased to declare a supplemental dividend of $0.11 per share for the Q1, payable on June 17. Speaker 200:07:16Our Board has also declared a regular dividend of $0.42 per share for the Q2, payable on July 15, 2024. I'd now like to turn it over to Henry to discuss the market, our Q1 investment activity and the portfolio. Henry? Thanks, Jason. Speaker 300:07:36In terms of the market, 1st quarter direct lending volume was down nearly 30% from the 4th quarter, driven primarily by lower LBO and M and A activity. The majority of activity came from refinancings, which represented 36% of overall activity in the Q1, much of which was in the upper middle market where broadly syndicated loan arrangers and upper mid market focused direct lenders competed for transactions. March LBL volumes, however, were at their highest level since November and almost double February's total. As a result of this momentum, a stable economy, a strong private credit market and a significant backlog of transactions that sponsors are holding, we are optimistic that we will see a pickup in LBO volume through the remainder of the year. And while the syndicated markets are open, we believe the direct lending market remains a market of choice for sponsors in the lower and core middle market given the benefits of the direct lending expertise offered by managers like Crescent, including speed and certainty of execution and flexibility around the ability to craft bespoke capital structures. Speaker 300:08:41Please turn to Slide 15, where we highlight our recent activity. As you can see on the left hand side of the page, gross deployment in the Q1 totaled $74,000,000 95% of which was in senior secured 1st lien and unitranche investments. During the quarter, we closed 7 new platform investments totaling $43,000,000 with the remaining $31,000,000 coming from incremental investments in our existing portfolio companies. Incremental investments as a percentage of overall activity was elevated in Q1 compared to recent quarters as we've seen higher levels of opportunistic refinancing and add on opportunities within our existing borrower universe. This provides an ongoing opportunity set for us to make incremental investments in existing well performing companies seeking to grow via the pursuit of accretive M and A. Speaker 300:09:28$74,000,000 in gross deployment compares to approximately $98,000,000 in aggregate exits, sales and repayments. The new investments during the Q1 were loans to private equity backed companies with sulfur floors, attractive fees and a weighted average spread of approximately 600 basis points. We continue to back well capitalized borrowers with significant equity cushions and the weighted average loan to value of our new investments for the quarter was 40%. Turning back to the broader portfolio, please flip to Slide 16. You can see that the weighted average yield of our income producing securities at cost remained flat quarter over quarter at 12.3% and is up 50 basis points year over year. Speaker 300:10:10It is worth noting that for the first time, this metric represented by the dark blue line at the top of the chart includes the impact of income producing equity investments. This includes dividends from the Logan joint venture as well as our partnership interest in GACP II and WhiteHawk. Prior period yield figures have been retroactively updated for consistency. We believe that this update provides a more comprehensive view of expected near term investment income from CCAP's portfolio. As of December 31, 98% of our debt investments at fair value were floating rate with a weighted average floor of 80 basis points, which compares to our 65% floating rate liability structure based on debt drawn with 0% floors. Speaker 300:10:52Overall, our investment portfolio continues to perform well with strong year over year weighted average revenue and EBITDA growth. That being said, we have continued to closely monitor the impact of rising borrowing costs on our portfolio companies. The weighted average interest coverage of the companies in our investment portfolio at quarter end improved from 1.7 times at year end to 1.8x as of quarter end. As a reminder, this calculation is based on the latest annualized base rate as of each respective quarter. We also continue to closely monitor how our portfolio companies are managing fixed charges. Speaker 300:11:28Our analysis demonstrates that our portfolio companies in the aggregate are well positioned to address fixed charges with operating cash flows and available balance sheet liquidity. As expected, we saw a modest increase in aggregate revolver utilization during the Q1 with approximately 56% of aggregate revolver capacity available across the portfolio as of quarter end, which is more than ample in our view. The strength of our portfolio continues to benefit from the substantial amount of equity invested in our companies, most of it's applied by large and well established private equity firms with whom we have long standing relationships and have partnered within multiple transactions. And we note that the weighted average loan to value in the portfolio at Time Warner right is approximately 41%. With that, I will now turn it over to Gerard. Speaker 400:12:14Thanks, Henry, and hello, everyone. Our net investment income per share of 0.6 $3 for the Q1 of 2024 compares to $0.61 per share for the prior quarter and $0.54 per share for the Q1 of 2023. Total investment income of $50,400,000 for the Q1, the highest quarterly figure we've reported since inception, compares to $50,000,000 for the prior quarter. Recurring yield related income was flat quarter over quarter at 47,800,000 dollars and accounted for approximately 95% of this quarter's total investment income. TIC income continues to represent a modest portion of our revenue 3% of total investment income, which compares favorably to the BDC peer group. Speaker 400:13:02We remain highly sensitive to PIC income, particularly in a higher for longer rate environment. What we consider nonrecurring investment income, which consists primarily of accelerated amortization, fee income and common stock dividends increased approximately $500,000 quarter over quarter from $2,100,000 to 2,600,000 dollars driven primarily by 2 large realizations and an increase in structuring fees. While we expect some level of non recurring or transactional investment income each quarter, our non recurring investment income over the last two quarters was unusually high, exceeding $2,000,000 in each of those two quarters. Our GAAP earnings per share or net income for the Q1 of 2024 was $0.76 This was primarily the result of net investment income outpacing the regular and supplemental dividends coupled with $0.13 per share of net unrealized depreciation. As of March 31, our stockholders' equity was $752,000,000 resulting in net asset value per share of $20.28 as compared to $743,000,000 or $20.04 per share last quarter. Speaker 400:14:15Now let's shift to our capitalization and liquidity. I'm on Slide 19. We continue to maintain a conservative mindset to both balance sheet liquidity and BDC leverage, maintaining the company with a full economic cycle mentality. While this starts with our underwriting of new investment opportunities, it also applies to how we manage CCAP's capitalization and liquidity. As of March 31, our debt to equity ratio was 1.11x, down from 1.15 times in the prior quarter. Speaker 400:14:48Our liquidity position remains strong with 3 $44,000,000 of undrawn capacity subject to leverage, borrowing base and other restrictions and $32,000,000 in cash and cash equivalents as of quarter end. The weighted average stated interest rate on our total borrowings was 6.97% as of quarter end. And as we've highlighted on the right hand side of the slide, there are no debt maturities until 2026. As Jason noted, for the Q2 of 2024, our Board increased our regular dividend to $0.42 per share, which we are well positioned to cover over the longer term. As a point of clarification, we will continue to declare and pay quarterly supplemental dividends subject to approval by the Board to enhance stockholder distributions. Speaker 400:15:36With that, I'd like to turn it back to Jason for closing remarks. Speaker 200:15:40Thanks, Gerhard. In closing, we are pleased with this quarter's strong financial results and the performance of our investment portfolio. We've continued to maintain a defensively positioned portfolio that delivers a stable NAV profile with consistent dividend coverage. And the announced increase in our base dividend highlights our conviction in CCAP's long term earnings power. As we look forward over the remainder of 2024, we remain confident in the continued strong performance of CCAP's portfolio and believe we are on track to deliver attractive risk adjusted returns to our stockholders. Speaker 200:16:18Finally, in just over a month on June 11, we will be hosting our inaugural Analyst and Investor Day. We look forward to speaking with many of you then. And with that, operator, we can open the line for questions. Operator00:16:32Thank And our first question comes from Paul Johnson with KBW. Speaker 500:17:07Good afternoon, guys. Thanks for taking my questions. Congrats on a good quarter. Weighted average yield this quarter was obviously pretty stable as was the spread. I was just kind of wondering if you can kind of speak to that in the market into your portfolio and kind of what you're seeing in the market? Speaker 200:17:31Hey, Paul. It's Jason. Thanks for the question. I think we're pretty pleased with where we've been able to price new opportunities in this environment. Henry talked a little bit about the competition that we're seeing here in 2024 deals. Speaker 200:17:54We've certainly had lower volumes, which has driven pricing tighter as well as the presence of the BSL market again, which has certainly been active here in 2024. That's largely been focused on the upper bid market, where they're competing with some of the larger private credit arrangers in deals that generally we would characterize as in excess of $1,000,000,000 in deal size. I think if I were to sort of think about pricing over the last couple of quarters, in the upper mid market, I would say that on the uni side, pricing has come down generally 25 to 50 basis points, probably from a 5.25 type spread to 500 and even in some cases, 475. And then in the core and lower middle market, which is where we at Crescent generally focus, I'd say pricing over the same period of time has probably come in about 25 bps from $575,000,000 to a $550,000,000 deal or from a $550,000,000 deal to a $525,000,000 deal. Speaker 500:19:08Thanks for that. That's really good color. And then kind of just on the marks for the quarter, math is up nicely. Just was that just kind of general portfolio kind of marks probably across your book or is that anything specific driving that like in the non accrual resolution or anything like that? Speaker 400:19:34Hey, good morning. This is Gerhard. I can take that. There's nothing individually material. We'd really link that increase in marks to what Jason said a minute ago, which is tightening of spreads. Speaker 500:19:52Got it. Thanks. And then last one for me, just on your comment on the non recurring income being a little bit higher over the last two quarters by about $2,000,000 or so. I guess just kind of how should we think about that going forward? Would you expect that to basically not to really basically not get another $2,000,000 or so kind of going forward. Speaker 500:20:17And is that kind of non recurring income, is that factored into your kind of weighted average yield calculation for the quarter? Speaker 400:20:30Yes, yes. Thanks for the I'll maybe take those in reverse the second part. We generally do not include the non recurring income in our yield calculation. So that would be the yield calc is recurring income only, including OID. Regarding the first part of your question, it is obviously difficult to project nonrecurring income because the 2 highest drivers are accelerated OID and transactional fee income. Speaker 400:21:00And it's just an inherent level of uncertainty or volatility in those numbers quarter over quarter. I will say that 95 plus percent of our total revenue is recurring. Our historical range of non recurring has been between about $500,000 and over $2,000,000 which you heard in the prepared remarks. So while we don't provide forward looking guidance on NII, as we look at Q2 today, while we expect some level of non recurring income, we don't believe it will be quite as high as in Q1 of 2024 and Q4 of last year. Speaker 500:21:37Got it. Appreciate that. That's helpful. That's all for me. Thanks again. Speaker 200:21:43Thanks a lot, Paul. Operator00:22:04At this time, I'm currently showing no questions in the queue. I'll now turn it back over to management for any closing remarks. Speaker 200:22:10Thanks very much. Everyone, we appreciate your time and attention and support of CCAP. We look forward to speaking with you next quarter and also at the Analyst and Investor Day in the interim. Thank you. Operator00:22:26This does conclude today's program. Thank you for your participation. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallCrescent Capital BDC Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Crescent Capital BDC Earnings HeadlinesCrescent Capital BDC, Inc. Schedules Earnings Release and Conference Call to Discuss its First Quarter Ended March 31, 2025 Financial ResultsApril 22, 2025 | globenewswire.comI'm Buying 2 Income Machines With 5-12% YieldsApril 22, 2025 | seekingalpha.comTrump’s Secret Social Security Plan?In less than a decade, Social Security could be out of money. But a surprising plan from Trump’s inner circle may not just save the system — it could unlock a major opportunity for savvy investors. 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There are 6 speakers on the call. Operator00:00:00Good day, everyone, and welcome to today's Crescent Capital BDC, Inc. 1st Quarter Earnings Call. At this time, all participants are in a listen only mode. Later, you will have an opportunity to ask questions during the question and answer session. Please note this call is being recorded. Operator00:00:21And it is now my pleasure to turn today's call over to Dan McMahon, Head of Investor Relations. Please go ahead. Speaker 100:00:28Good morning, and welcome to Crescent Capital BDC, Inc. Q1 ended March 31, 2024 Earnings Conference Call. Please note that Crescent Capital BDC Inc. May be referred to as CCAP, Crescent BDC or the company throughout the call. Before we begin, I'll start with some important reminders. Speaker 100:00:47Comments made over the course of this conference call and webcast may contain forward looking statements and are subject to risks and uncertainties. The company's actual results could differ materially from those expressed in such forward looking statements for any reason, including those listed in its SEC filings. The company assumes no obligation to update any such forward looking statements. Please also note that past performance or market information is not a guarantee of future results. Yesterday, after the market closed, the company issued its earnings press release for the Q1 ended March 31, 2024 and posted a presentation to the IR section of its website at crescentbdc.com. Speaker 100:01:27Presentation should be reviewed in conjunction with company's Form 10 Q filed yesterday with the SEC. As a reminder, this call is being recorded for replay purposes. Speaking on today's call will be CCAP's Chief Executive Officer, Jason Breaux President, Henry Chiang and Chief Financial Officer, Gerhard Lombard. With that, I'd now like to turn it over to Jason. Speaker 200:01:50Thank you, Dan. Hello, everyone, and thank you all for joining us today. We're very pleased to report another record quarter of earnings with continued strong credit performance across the portfolio. Net investment income or NII was $0.63 per share, up $0.02 from last quarter. Our NII has increased in each of the past 5 quarters, resulting in record NII for the 5th consecutive quarter. Speaker 200:02:17This quarter's earnings translated into an annualized NII return on equity of 12.6%. With our earnings well in excess of the regular dividend, our Board has declared a supplemental dividend for the Q1 of $0.11 per share, which when coupled with our previously declared regular dividend of $0.41 per share equates to a 10.3% annualized dividend yield on March 31, 2024 NAV. We've demonstrated meaningful earnings in excess of our base dividend over the last several quarters. In response, we implemented a supplemental dividend policy in the Q1 of 2023 to share additional earnings upside with our stockholders in the form of increased distributions. This was in light of our view that earning the base dividend has always been a key part of the CCAP story. Speaker 200:03:08We've never cut it and we've paid the current base dividend of $0.41 for 22 consecutive quarters. Reflecting confidence in both the sustainability of CCAP's NII and the continued strong credit performance of our portfolio, we are pleased to announce that our Board recently approved a $0.01 increase to our regular dividend, increasing the 2nd quarter regular dividend to $0.42 per share. What underpins this increase in our base dividend is our conviction in CCAP's longer term earnings power. Having reviewed firsthand the impact of a higher rate environment on our portfolio and the origination opportunities in our private credit pipeline, we are bullish on CCAP's longer term ability to continue its track record of earning its regular dividend. We also note that we have benefited from managing and monitoring the loans that we acquired from First Eagle BDC for over a year now and believe that the earnings from the current assets as well as the loans that we expect to rotate into will continue to be attractive for CCAP's longer term earnings profile. Speaker 200:04:15The strength of our earnings and the positive valuation momentum in our portfolio also led to growth in our net asset value, which increased 1.2% in the quarter and 4.6% year over year to $20.28 per share, which is the highest it has been since June 2022. Net income per share was $0.76 in the first quarter, corresponding to an annualized ROE of 15.2%. Let's shift gears. Please turn to Slides 13 and 14 of the presentation, which highlights certain characteristics of our portfolio. We ended the quarter with approximately $1,600,000,000 of investments at fair value across a highly diversified portfolio of 183 companies with an average investment size of approximately 0.5% of the total portfolio. Speaker 200:05:11We've deliberately maintained an investment portfolio that consists primarily of senior secured 1st lien and unitranche 1st lien loans, collectively representing 90% of the portfolio at fair value at quarter end, up modestly from the prior quarter. This speaks to our continued focus on maintaining a defensively positioned portfolio with greater downside protection and lower risk of loss compared to portfolios with greater second lien and subordinated debt exposure. We have focused our investing efforts on non cyclical industries with high free cash flow characteristics and remain well diversified across 20 broad industry categorizations. Our investments are almost entirely supported by well capitalized private equity sponsors with 98% of our debt portfolio in sponsor backed companies as of quarter end. We've been pleased with the fundamental performance of our portfolio as indicated by our performance ratings and non accrual levels. Speaker 200:06:10Our weighted average portfolio grade of 2.1 remained stable quarter over quarter. And on Slide 17, you will see that the percentage of risk rated 12 investments, the highest ratings our portfolio companies can receive, accounted for 89% of the portfolio at fair value, an improvement from 87% at year end. As of quarter end, we had investments in 7 portfolio companies on non accrual status, representing 1.6% and 0.9% of our total debt investments at cost and fair value, respectively. This compares to 9 portfolio companies on non accrual status, representing 2.0% of total debt investments at cost as of year end, as our position in Matilda Jane, our First Eagle name, was realized above our acquired cost basis and Integro was removed from non accrual status. As previously noted, we are pleased to declare a supplemental dividend of $0.11 per share for the Q1, payable on June 17. Speaker 200:07:16Our Board has also declared a regular dividend of $0.42 per share for the Q2, payable on July 15, 2024. I'd now like to turn it over to Henry to discuss the market, our Q1 investment activity and the portfolio. Henry? Thanks, Jason. Speaker 300:07:36In terms of the market, 1st quarter direct lending volume was down nearly 30% from the 4th quarter, driven primarily by lower LBO and M and A activity. The majority of activity came from refinancings, which represented 36% of overall activity in the Q1, much of which was in the upper middle market where broadly syndicated loan arrangers and upper mid market focused direct lenders competed for transactions. March LBL volumes, however, were at their highest level since November and almost double February's total. As a result of this momentum, a stable economy, a strong private credit market and a significant backlog of transactions that sponsors are holding, we are optimistic that we will see a pickup in LBO volume through the remainder of the year. And while the syndicated markets are open, we believe the direct lending market remains a market of choice for sponsors in the lower and core middle market given the benefits of the direct lending expertise offered by managers like Crescent, including speed and certainty of execution and flexibility around the ability to craft bespoke capital structures. Speaker 300:08:41Please turn to Slide 15, where we highlight our recent activity. As you can see on the left hand side of the page, gross deployment in the Q1 totaled $74,000,000 95% of which was in senior secured 1st lien and unitranche investments. During the quarter, we closed 7 new platform investments totaling $43,000,000 with the remaining $31,000,000 coming from incremental investments in our existing portfolio companies. Incremental investments as a percentage of overall activity was elevated in Q1 compared to recent quarters as we've seen higher levels of opportunistic refinancing and add on opportunities within our existing borrower universe. This provides an ongoing opportunity set for us to make incremental investments in existing well performing companies seeking to grow via the pursuit of accretive M and A. Speaker 300:09:28$74,000,000 in gross deployment compares to approximately $98,000,000 in aggregate exits, sales and repayments. The new investments during the Q1 were loans to private equity backed companies with sulfur floors, attractive fees and a weighted average spread of approximately 600 basis points. We continue to back well capitalized borrowers with significant equity cushions and the weighted average loan to value of our new investments for the quarter was 40%. Turning back to the broader portfolio, please flip to Slide 16. You can see that the weighted average yield of our income producing securities at cost remained flat quarter over quarter at 12.3% and is up 50 basis points year over year. Speaker 300:10:10It is worth noting that for the first time, this metric represented by the dark blue line at the top of the chart includes the impact of income producing equity investments. This includes dividends from the Logan joint venture as well as our partnership interest in GACP II and WhiteHawk. Prior period yield figures have been retroactively updated for consistency. We believe that this update provides a more comprehensive view of expected near term investment income from CCAP's portfolio. As of December 31, 98% of our debt investments at fair value were floating rate with a weighted average floor of 80 basis points, which compares to our 65% floating rate liability structure based on debt drawn with 0% floors. Speaker 300:10:52Overall, our investment portfolio continues to perform well with strong year over year weighted average revenue and EBITDA growth. That being said, we have continued to closely monitor the impact of rising borrowing costs on our portfolio companies. The weighted average interest coverage of the companies in our investment portfolio at quarter end improved from 1.7 times at year end to 1.8x as of quarter end. As a reminder, this calculation is based on the latest annualized base rate as of each respective quarter. We also continue to closely monitor how our portfolio companies are managing fixed charges. Speaker 300:11:28Our analysis demonstrates that our portfolio companies in the aggregate are well positioned to address fixed charges with operating cash flows and available balance sheet liquidity. As expected, we saw a modest increase in aggregate revolver utilization during the Q1 with approximately 56% of aggregate revolver capacity available across the portfolio as of quarter end, which is more than ample in our view. The strength of our portfolio continues to benefit from the substantial amount of equity invested in our companies, most of it's applied by large and well established private equity firms with whom we have long standing relationships and have partnered within multiple transactions. And we note that the weighted average loan to value in the portfolio at Time Warner right is approximately 41%. With that, I will now turn it over to Gerard. Speaker 400:12:14Thanks, Henry, and hello, everyone. Our net investment income per share of 0.6 $3 for the Q1 of 2024 compares to $0.61 per share for the prior quarter and $0.54 per share for the Q1 of 2023. Total investment income of $50,400,000 for the Q1, the highest quarterly figure we've reported since inception, compares to $50,000,000 for the prior quarter. Recurring yield related income was flat quarter over quarter at 47,800,000 dollars and accounted for approximately 95% of this quarter's total investment income. TIC income continues to represent a modest portion of our revenue 3% of total investment income, which compares favorably to the BDC peer group. Speaker 400:13:02We remain highly sensitive to PIC income, particularly in a higher for longer rate environment. What we consider nonrecurring investment income, which consists primarily of accelerated amortization, fee income and common stock dividends increased approximately $500,000 quarter over quarter from $2,100,000 to 2,600,000 dollars driven primarily by 2 large realizations and an increase in structuring fees. While we expect some level of non recurring or transactional investment income each quarter, our non recurring investment income over the last two quarters was unusually high, exceeding $2,000,000 in each of those two quarters. Our GAAP earnings per share or net income for the Q1 of 2024 was $0.76 This was primarily the result of net investment income outpacing the regular and supplemental dividends coupled with $0.13 per share of net unrealized depreciation. As of March 31, our stockholders' equity was $752,000,000 resulting in net asset value per share of $20.28 as compared to $743,000,000 or $20.04 per share last quarter. Speaker 400:14:15Now let's shift to our capitalization and liquidity. I'm on Slide 19. We continue to maintain a conservative mindset to both balance sheet liquidity and BDC leverage, maintaining the company with a full economic cycle mentality. While this starts with our underwriting of new investment opportunities, it also applies to how we manage CCAP's capitalization and liquidity. As of March 31, our debt to equity ratio was 1.11x, down from 1.15 times in the prior quarter. Speaker 400:14:48Our liquidity position remains strong with 3 $44,000,000 of undrawn capacity subject to leverage, borrowing base and other restrictions and $32,000,000 in cash and cash equivalents as of quarter end. The weighted average stated interest rate on our total borrowings was 6.97% as of quarter end. And as we've highlighted on the right hand side of the slide, there are no debt maturities until 2026. As Jason noted, for the Q2 of 2024, our Board increased our regular dividend to $0.42 per share, which we are well positioned to cover over the longer term. As a point of clarification, we will continue to declare and pay quarterly supplemental dividends subject to approval by the Board to enhance stockholder distributions. Speaker 400:15:36With that, I'd like to turn it back to Jason for closing remarks. Speaker 200:15:40Thanks, Gerhard. In closing, we are pleased with this quarter's strong financial results and the performance of our investment portfolio. We've continued to maintain a defensively positioned portfolio that delivers a stable NAV profile with consistent dividend coverage. And the announced increase in our base dividend highlights our conviction in CCAP's long term earnings power. As we look forward over the remainder of 2024, we remain confident in the continued strong performance of CCAP's portfolio and believe we are on track to deliver attractive risk adjusted returns to our stockholders. Speaker 200:16:18Finally, in just over a month on June 11, we will be hosting our inaugural Analyst and Investor Day. We look forward to speaking with many of you then. And with that, operator, we can open the line for questions. Operator00:16:32Thank And our first question comes from Paul Johnson with KBW. Speaker 500:17:07Good afternoon, guys. Thanks for taking my questions. Congrats on a good quarter. Weighted average yield this quarter was obviously pretty stable as was the spread. I was just kind of wondering if you can kind of speak to that in the market into your portfolio and kind of what you're seeing in the market? Speaker 200:17:31Hey, Paul. It's Jason. Thanks for the question. I think we're pretty pleased with where we've been able to price new opportunities in this environment. Henry talked a little bit about the competition that we're seeing here in 2024 deals. Speaker 200:17:54We've certainly had lower volumes, which has driven pricing tighter as well as the presence of the BSL market again, which has certainly been active here in 2024. That's largely been focused on the upper bid market, where they're competing with some of the larger private credit arrangers in deals that generally we would characterize as in excess of $1,000,000,000 in deal size. I think if I were to sort of think about pricing over the last couple of quarters, in the upper mid market, I would say that on the uni side, pricing has come down generally 25 to 50 basis points, probably from a 5.25 type spread to 500 and even in some cases, 475. And then in the core and lower middle market, which is where we at Crescent generally focus, I'd say pricing over the same period of time has probably come in about 25 bps from $575,000,000 to a $550,000,000 deal or from a $550,000,000 deal to a $525,000,000 deal. Speaker 500:19:08Thanks for that. That's really good color. And then kind of just on the marks for the quarter, math is up nicely. Just was that just kind of general portfolio kind of marks probably across your book or is that anything specific driving that like in the non accrual resolution or anything like that? Speaker 400:19:34Hey, good morning. This is Gerhard. I can take that. There's nothing individually material. We'd really link that increase in marks to what Jason said a minute ago, which is tightening of spreads. Speaker 500:19:52Got it. Thanks. And then last one for me, just on your comment on the non recurring income being a little bit higher over the last two quarters by about $2,000,000 or so. I guess just kind of how should we think about that going forward? Would you expect that to basically not to really basically not get another $2,000,000 or so kind of going forward. Speaker 500:20:17And is that kind of non recurring income, is that factored into your kind of weighted average yield calculation for the quarter? Speaker 400:20:30Yes, yes. Thanks for the I'll maybe take those in reverse the second part. We generally do not include the non recurring income in our yield calculation. So that would be the yield calc is recurring income only, including OID. Regarding the first part of your question, it is obviously difficult to project nonrecurring income because the 2 highest drivers are accelerated OID and transactional fee income. Speaker 400:21:00And it's just an inherent level of uncertainty or volatility in those numbers quarter over quarter. I will say that 95 plus percent of our total revenue is recurring. Our historical range of non recurring has been between about $500,000 and over $2,000,000 which you heard in the prepared remarks. So while we don't provide forward looking guidance on NII, as we look at Q2 today, while we expect some level of non recurring income, we don't believe it will be quite as high as in Q1 of 2024 and Q4 of last year. Speaker 500:21:37Got it. Appreciate that. That's helpful. That's all for me. Thanks again. Speaker 200:21:43Thanks a lot, Paul. Operator00:22:04At this time, I'm currently showing no questions in the queue. I'll now turn it back over to management for any closing remarks. Speaker 200:22:10Thanks very much. Everyone, we appreciate your time and attention and support of CCAP. We look forward to speaking with you next quarter and also at the Analyst and Investor Day in the interim. Thank you. Operator00:22:26This does conclude today's program. Thank you for your participation. You may now disconnect.Read morePowered by