Crescent Capital BDC, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Q4 2022 Crescent Capital BDC, Inc. Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, February 23, 2023. I would now like to turn the conference over to Dan McMahon. Please go ahead.

Good morning, and welcome to Crescent Capital BDC, Inc.' 's fourth quarter and year-ended December 31, 2022 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. Comments 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. During this conference call, we may discuss certain non-GAAP measures as defined by SEC Regulation G. such as adjusted net investment income, or NII, per share. The company believes that adjusted NII per share provides useful information to investors regarding financial performance because it's one method the company uses to measure its financial condition and results of operations. A reconciliation of adjusted net investment income per share to net investment income per share, the most directly comparable GAAP financial measure, can be found in the accompanying slide presentation for this call. In addition, a reconciliation of this measure may also be found in our earnings release. Yesterday after the market closed, the company issued its earnings press release for the fourth quarter and year-ended December 31, 2022, and posted a presentation to the IR section of its website at www.crescentbdc.com. The presentation should be reviewed in conjunction with the company's Form 10-K 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 President and Chief Executive Officer, Jason Breaux, Chief Financial Officer, Gerhard Lombard, and Managing Director, Henry Chung. With that, I'd now like to turn it over to Jason.

Thank you, Dan. Good morning, everyone, and thank you for joining our earnings call. We appreciate your continued interest in CCAP. I'll provide some fourth quarter and full year highlights, touch on our current portfolio and positioning, and then turn it over to Henry to review our recent activity in more detail. Gerhard will then review our financial performance during the fourth quarter. So let's begin. Please turn to slide six, where you'll see a summary of our results. Adjusted debt investment income increased 17% to 49 cents per share from 42 cents per share for the quarter ended September 30, 2022. This increase was driven primarily by rising base rates and higher spreads. Total investment income again reached its highest level since inception, and recurring yield-related investment income continues to grow in both absolute dollars and at the percentage of our total revenue, which Gerhard will provide more color on. On a gap basis, fourth quarter net investment income per share was 52 cents. The difference relates to a non-cash reversal of our capital gains-based incentive fees on net realized and unrealized capital appreciation. As of year end, this gap expense accrual has been fully reversed. Our net asset value per share ended the year at $19.83, down 1.6% as compared to the prior quarter. The decline relates primarily to unrealized losses we took to reflect wider credit spreads in the market, as volatility within the leveraged finance and equity markets continued during the fourth quarter. Importantly, we generated net realized gains for the full year 2022, delivering positive realized gains in excess of our losses. Realized gains and losses, we believe, is a more important metric in grading our performance than unrealized gains and losses, which has meaningfully less impact on our longer term results. In our view, Our long-term track record of strong credit performance and NAV stability since inception demonstrates the merits of our proven investment process as we work to deliver attractive results to our shareholders. Please turn to slides 13 and 14 of the presentation, which highlight certain characteristics of our diversified portfolio. We ended the year with nearly $1.3 billion of investments at fair value across 129 portfolio companies, with an average investment size of less than 1% of the total portfolio. Our investment portfolio continues to consist primarily of senior secured first lien and Unitron first lien loans, collectively representing 90% of the portfolio at fair value, up from 89% in the prior quarter. And we remain well diversified across 18 industries and continue to lend almost exclusively to private equity-backed companies. with 98% of our debt portfolio in sponsor-backed companies as of year end. We generally believe that our private equity partners provide operational financial support to strengthen their portfolio companies for long-term value creation, which is particularly valuable during periods of heightened volatility, like the one we are investing in today. For the fourth quarter, over 99% of our total debt investments at fair value made full scheduled principal and interest payments. Two more credit trends to highlight. Continued strong performance ratings and low non-accrual levels. Our weighted average portfolio grade of 2.1 was unchanged as compared to the past few quarters, and the percentage of risk-rated one and two investments, the highest ratings our portfolio companies can receive, accounted for 87% of the portfolio at fair value, down modestly from last quarter. As of year end, consistent with the prior quarter, we had investments in four portfolio companies on non-equal status, representing 2.0 and 1.2% of our total debt investments at cost and fair value, respectively. A few more updates before I turn it over to Henry. First, we are targeting the closing of our announced merger with First Eagle BDC this quarter. A couple of reminders as it relates to the transaction. One, The boards of directors of Crescent BDC and First Eagle BDC have each unanimously approved the transaction. And on March 7th, First Eagle is conducting a special meeting of its stockholders, whereby they will be asked to adopt the agreement and plan a merger. And two, the exchange ratio for the stock component of the merger consideration and the amount of cash from Crescent BDC will be determined by the respective net asset values of Crescent BDC and First Eagle BDC, and customary merger adjustments two days prior to closing. We will not be outlining additional details of the transaction on this call today, and we direct any interested investors to the proxy statement that was filed in January. We remain very excited about the acquisition, as we believe the combination provides many strategic and financial benefits to the combined company. CBDC Senior Loan Fund, our joint venture, was formally dissolved during the fourth quarter after being largely wound down in recent quarters. We redeployed the majority of the proceeds from this monetization activity, primarily into directly originated higher spread Crescent private credit opportunities. Finally, for the first quarter of 2023, our board declared a 41 cent per share quarterly cash dividend. which will be paid on April 17th, 2023 to stockholders of record as of March 31, 2023. I'd now like to turn it over to Henry to discuss our Q4 investment activity. Henry.