Golub Capital BDC, Inc.

Hello, everyone, and welcome to GBDC's earnings call for the fiscal quarter ended December 31, 2025. Before we begin, I'd like to take a moment to remind our listeners that remarks made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts made during this call may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in GBDC's SEC filings. For materials we intend to refer to on today's earnings call, please visit the investor resources tab on the homepage of our website, which is www.gallupcapitalbdc.com, and click on the events and presentations link. Our earnings release is also available on our website in the investor resources section, As a reminder, this call is being recorded. With that, I'm pleased to turn the call over to David Golub, Chief Executive Officer of GBDC.

Hello, everybody, and thanks for joining us today. I'm joined by Tim Topics, our Chief Operating Officer, and Chris Erickson, our Chief Financial Officer. For those of you who are new to GBDC, our investment strategy is focused on providing first lien senior secured loans to healthy, resilient middle market companies that are backed by strong and partnership-oriented private equity sponsors. Yesterday, we issued our earnings press release for the fiscal quarter ended December 31st, and we posted an earnings presentation on our website. We'll be referring to this presentation during the call today. I'm going to start, as I usually do, with headlines and a summary of performance for the quarter. Then Tim and Chris are going to walk you through our operating financial performance for the quarter in detail. And finally, I'll wrap up with some observations on current market conditions and our outlook for the coming period. Let's start with three headlines. The first headline is that despite four continuing industry headwinds, GBDC had an okay quarter. Not great, but solid given the environment. Adjusted NII per share was 38 cents, which translates to an adjusted NII ROE of 10.2%. Adjusted net income per share was 25 cents. for an adjusted ROE of 6.7%, and GBDC paid a 39 cent per share distribution. So, what are these headwinds? I described all four last quarter. First, lower base rates. Second, tighter spreads, not just in our market, but across almost every credit asset class other than subprime. Third, muted M&A activity, although the second half of calendar 25 improved relative to the first half. And fourth, continued high levels of credit stress. The second headline is that we expect these headwinds to continue for some time, and we're planning for a challenging 2026. The third headline, consistent with our comments on last quarter's call, is that our board of directors revisited GBDC's dividend policy, and after careful evaluation and in light of the headwinds I just described, the board decided to reset the company's quarterly base dividend to 33 cents per share, or about 9% of NAV per share. We also plan to maintain the quarterly variable supplemental dividend policy going forward. We believe this change is consistent with our four longstanding dividend priorities, maintaining a stable net asset value over time, minimizing excise taxes over time, adjusting our base distribution level infrequently, and paying a higher dividend yield on NAVA sustainable consistent with those goals. Now I'll pass the call over to Tim Topics to discuss operating performance in the quarter in more detail.

Thanks, David. Let's begin on slide four. GBDC's $0.38 per share of adjusted net investment income and $0.25 per share of adjusted earnings were driven by four key factors this quarter. Let me walk through each of those in turn. First, overall credit performance generally remains solid. Approximately 89% of GBDC's investment portfolio at fair value remains in our highest performing internal rating categories. Investments on non-accrual status remain very low at just 0.8% of the total investment portfolio at fair value. This level is well below that of our BDC peer industry average. And although adjusted net unrealized and realized losses increased to 13 cents per share, they were primarily related to fair value markdowns on a small tail of underperforming borrowers at GBDC, including 6 cents per share in markdowns on equity investments in these borrowers. The second key earnings driver. GBDC's investment income yield of 10% was down 40 basis points sequentially, mostly driven by lower base rates and, to a lesser extent, lower weighted average spread across the portfolio. These negative headwinds were in part offset by the third key earnings driver, a continued decline in GBDC's borrowing costs, reflecting the impact of GBDC's predominantly floating rate debt capital structure. And finally, GBDC's earnings continued to benefit from a market-leading fee structure and one of the lowest operating expense loads in the public BDC sector. Now, shifting to investment activity. GBDC's investment portfolio decreased by a modest 1.5% quarter over quarter to $8.6 billion at fair value. We remained highly selective and conservative in our underwriting. We closed on just 3.1% of the deals we were reviewed in the quarter. at a weighted average LTV of approximately 43%. We leaned on existing sponsor relationships and portfolio company incumbencies for approximately 60% of our origination volume and made loans to 18 new borrowers. We continue to leverage our scale to lead deals, acting as sole or lead lender in 96% of our transactions in the quarter. And we continue to focus on the core middle market, which we believe continues to offer better risk-adjusted returns potential than the larger borrower market. The median portfolio company EBITDA for our originations in the quarter was $81 million. Continuing on slide four, let me briefly summarize distributions paid and certain balance sheet changes in the quarter. Total distributions paid in the quarter were 39 cents per share. As David mentioned at the outset, our Board of Directors has updated the base distribution level to 33 cents per share. And in addition, we'll evaluate on a quarterly basis a variable supplemental distribution that will seek to distribute 50% of the earnings in excess of 33 cents per share. Continuing on with other balance sheet updates, net debt to equity remains stable quarter over quarter, ending at 1.23 times within our targeted range as 0.85 to 1.25 times. During the quarter, we continued our opportunistic repurchasing of GBDC shares on an accretive basis. Total shares were purchased in calendar year 2025 grew to 5.5 million shares or $76.5 million in aggregate value. In the quarter, these capital management transactions resulted in one penny per share of accretion to net asset value. I'm going to turn it over to Chris now to take us through our financial results in detail.

Thanks, Tim. Turning to slide seven, you can see how the earnings drivers Tim just described and distributions paid in the quarter translated into GBDC December 31, 2025 NAV per share of $14.84. Adjusted NII per share of 38 cents. A 39 cent per share base distribution paid out during the quarter. adjusted net realized and unrealized losses of 13 cents per share and a penny per share of NAV accretion from share repurchases. Together, these results drove a net asset value per share decrease to $14.84. Turning to size 10, this details our origination activity for the quarter. Net funds growth defined as funded commitments and delayed draw term loan and net revolver draws. plus exits and sales and net market value changes in portfolio fair values, decreased by $130 million for the quarter. This was primarily due to repayments and exits outpacing funded new originations and delayed draw term loans and net revolver drops. Looking at the bottom of the slide, the weighted average rate on new investments was 8.6%, a decline of 30 basis points from the prior quarter, primarily the result of lower base rates at origination. Investments that repaid in the quarter were at a weighted average rate of 9.4%. Slide 11 shows GVC's overall portfolio mix. As you can see, the portfolio breakdown by investment types remained consistent quarter over quarter, with one-stop loans continuing to represent around 87% of the portfolio at fair value. Slide 12 shows that GVC's portfolio remains highly diversified by portfolio company, with an average investment size of approximately 20 basis points across 420 distinct portfolio companies. Additionally, our largest borrower represents just 1.6% of the debt investment portfolio, and our top 10 largest borrowers represent just 12% of the portfolio. We believe GBDC is one of the most diversified and granular portfolios in the public BDC sector, modulating credit risk through position size. As of December 31, 2025, 92% of our investment portfolio consists of the first-ling senior secured floating rate loans to borrowers across a diversified range of what we believe to be resilient industries. The economic analysis on slide 13 highlights the drivers of GBDC's net investment spread of 4.6%. Let's walk through the slide in detail. I'll start with the dark blue line, which is our investment income yield. As a reminder, the investment income yield includes the amortization of fees and discounts, which decreased approximately 40 basis points sequentially to 10%. Our cost of debt, the teal line, decreased approximately 20 basis points to 5.4%, reflecting our approximately 80% floating rate debt funding structure. Net-net, GBDC's weighted average net investment spread, the gold line, declined modestly quarter over quarter to 4.6%. Moving on to slides 14 and 15, let's take a closer look at our credit quality metrics. On slide 14, you can see that non-accruals increased quarter over quarter to 80 basis points of total investments at fair value and 1.3% of total investments at amortized costs, but remain at very low levels in absolute terms and relative to the broader BDC sector. During the quarter, the number of non-accrual investments increased to 14 investments as the return to accrual status of one portfolio company investment following a restructuring was offset by the addition of six portfolio company investments during the quarter. Side 15 shows the trend in internal performance ratings. As Tim noted earlier, approximately 89% of the total investment portfolio remained in our top two internal performance rating categories. And investments rated three, which signals a borrower may have the potential to or is expected to perform below expectations as compared to at underwriting, increased modestly to 10.1% of the total investment portfolio. The proportion of investments rated one and two, which are the investments we believe are most likely to see significant credit impairment, remain very low at just 1.3% of the portfolio at fair value. As we usually do, we're going to skip past slides 16 through 19. These slides have more detail on GBDC's financial statements, dividend history, and other key metrics. I'll wrap up this section by reviewing GBDC's liquidity and investment capacity on slides 20 and 21. First, let's focus on the key takeaways on slide 21. Our debt funding structure remains highly diversified and flexible. Our debt maturity profile remains well positioned with 49% of our debt funding in the form of unsecured notes across a well-laddered maturity profile. Consistent with our asset liability matching principle, 81% of GBDC's total debt funding is floating rate or swapped to a floating rate, levels that we believe are among the highest in the sector. GBDC is well-positioned to continue to modulate the impacts of lower interest rates on investment income through offsetting lower interest expense on its borrowings. And overall, our liquidity position remains strong, and we ended the quarter with approximately $1.3 billion of liquidity from unrestricted cash, undrawn commitments on our corporate revolver, and the unused, unsecured revolver provided by our advisor. Now, I'll hand it back over to David for closing remarks.

Thanks, Chris. I spoke at the beginning of this call about the four headwinds our industry has been facing, lower base rates, tighter spreads, muted M&A, and a protracted credit cycle. I want to shift now to talk about the impacts of these headwinds. There are likewise four I want to highlight. First, private credit ROEs have come down, including across the BDC space. By our estimates, public BDC net returns are on average about four percentage points lower year over year based on earnings reports through September 30th. We've seen similar findings from consultants who cover the broader private credit fund space. Now, this isn't a surprise. Funds of floating rate loans are necessarily impacted by lower base rates, lower spreads, and credit losses. Second impact. dispersion between good managers and let's call them not so good managers has increased. There's always been a lot of alpha in private credit. Now it's particularly high. Again, not surprised. The overwhelming driver of alpha in private credit comes from minimizing realized credit losses and periods of credit stress put this to the test. Third impact, the headwinds have generated a lot of press. Maybe not as colorful as last quarter's cockroaches, but still plentiful. And fourth, We've seen shareholders respond. We've seen shareholders respond by revaluing public BDCs and by increasing redemptions from semi-liquid BDCs. So where does the puck go from here? One of the advantages that comes with age and experience is pattern recognition. Now, this moment doesn't feel exactly like prior periods, but there's some elements that rhyme. So I want to share my take. After a period of growth and new entrance, the private credit industry is maturing. and will now, in my judgment, go through a Darwinian moment. Some firms will adapt and thrive, and some won't. This isn't a bad thing. We've been here before, and in some ways, this Darwinian moment, it feels a little overdue. And it's true, we're warriors, not optimists, but this doesn't mean we're pessimists either. Based on our experience through multiple cycles over the last 30-plus years, this is actually the kind of environment where we and other private credit specialists outperform. We have a playbook for doing that. It's a playbook that served us well for decades, including through a number of periods more stressful than this one. The playbook involves being very selective when making new loans, focusing on early detection of borrower underperformance, working with sponsors for early intervention, and addressing problems proactively. Our approach, it's really all about minimizing realized credit losses and being ready to play offense as opportunities arise. We're confident that this playbook will, once again, serve us well as we manage through this one. With that, operator, could you please open the line for questions?

Ladies and gentlemen, we will now begin the question and answer session. As a reminder, to ask a question, please press the star button followed by the number 1 on your telephone keypad. If you would like to ignore your question, please press star 1 again. One moment, please, for your first question. The first question comes from the line of Damien O'Shea of Wells Fargo. Please go ahead.

Hey, everyone. Good morning. Thanks for having me on. So, David, to start, the big topic, of course, is software. You're not only one of the leading private credit firms, but one of the leading early investors in software. So, of course, we'll ask you about that. I know this is a tough one, but any thoughts on the recent developments from AI firms that have spooked the software market and, of course, the private credit market? Do they give you concern in your software portfolio that's, of course, more enterprise SaaS-based? maybe concern, you know, from what happened in the last couple of weeks, but also concern as to what the progress from AI might look like in a few years from now when a lot of these, you know, credits will still be on your books. Thanks.

Thanks, Tim.

Yes, SaaSpocalypse, let's talk about it. Look, here's a real issue here. This is not just a market tantrum. I think underlying the recent market action, there are two core, you can call them perspectives or insights. The first is that AI is advancing more quickly than most people expected, and especially so in respect of tools that make coding easier. So, this month's plot advances are the latest manifestation of this trend, but it's a trend. The second is that some software companies are vulnerable to AI disruption as a result of this. I think we agree with both of these perspectives, and we think the market's right that there are going to be winners and losers from AI. We also think everybody, and this is implicit in your question, everybody needs to approach what's going on with AI with a bit of humility. Nobody really has all the answers here. This is a new technology and technology. It's been moving at a pace that even experts in the field have not expected. I want to go into more depth on who we think are going to be the winners and losers. But before I do that, I want to talk about what informs our view. And you mentioned a few elements of this. Short version, we're specialists at this. We've been investing in software companies for 20 years. We've completed 1,000 software deals over that period. We're good at this. Over that 20 years, we've had only five defaults. We've had 0.25% of our $145 billion of software commitments has defaulted. We've got a great team. We've got 25 dedicated professionals. We've got over 200 years of combined experience in this space across multiple credit and technology cycles. And we've approached this in a way you'd expect, a very gullible way. We've developed our own underwriting approach. It starts with a proprietary risk mapping framework, and that steers us to business models that we think are attractive. It steers us away from business models that we think have various vulnerabilities. We've developed proprietary diligence templates that enable us to pressure test this resilience, and that includes AI risk. We've been looking at AI risk for years. So what does that lead us to like? Let me give you some examples. We like enterprise-critical platforms, and those platforms have some characteristics that are common to them. They have, you know, sticky embedded workflows. They have long implementation cycles. It's hard for clients to switch to alternative products. We'd like market leaders that have proprietary data sets. Sometimes those are customer generated. Sometimes they're not. But AI competitors can't easily replicate proprietary data sets. We like working with sponsors who are experts. You know, they're leaning in early. They're themselves experts in AI. They're guiding their companies to be ahead of disruption. What don't we like? Well, you know, we... We have very little exposure to software that's focused on content creation, software that's focused on analytical overlays, software that's tool-based. We think there are going to be a lot of losers in those areas. So, you know, we are always evaluating our portfolio. We're big believers in early identification of problems, but you go through a period like we're going through right now at in terms of market action, it leads to an immediate response at Gallup Capital to review the portfolio. So we've been doing that in real time. And our conclusion so far is we feel quite confident in the portfolio. We're not saying that there is no AI risk. We're knowledgeable enough to know that we need to stay very humble and we need to stay very vigilant in looking at AI risk. But based on where we are right now, we feel very good about where the portfolio is positioned. Very helpful. I appreciate all that color. I'll just keep my follow-up on the topic, too. A lot of the inbounds come in and sort of question the loan-to-values, what that might mean. you know, it looks like you and peers are still investing in software, sort of normal capital structure parameters, but that's, of course, you know, last quarter's data and all that. Has this, I guess, for one, has this, what we see in the public market, is there a sort of similar pause going on whether it be on your side or the private equity side. And then, you know, kind of more importantly, if that does happen, do you think that means, does that mean the risk amplifies, like if you compare it to healthcare services a few years ago, where those models were dependent on a sort of roll-ups to achieve their EBITDA synergies and so forth. Like, is there that sort of element in software where higher cost of equity, higher cost of debt will itself be a problem? So, I think it's early right now to reach conclusions, but let's talk about a couple of different scenarios. In one scenario, it becomes meaningfully more challenging for software companies, even good software companies, to access capital in the broadly syndicated loan market or the high yield market. I'd argue that's actually a positive for private credit specialists like us because that will mean more opportunities, that will mean better pricing, that will mean better capital structures. But you're going to, we and others will need to make choices about which transactions we think are truly resilient and which we think are not. And I'm confident we can do that. So, I view that scenario as generally a positive. There's a second scenario in which this is a blip and the market comes roaring back and we quickly revert to where we were before this latest market action began. I think that's unlikely. I think there are enough real aspects to the insights about AI risk that we're likely not to see a quick bounce back. And then the third scenario I'd point to is sort of in between. It's one in which the market becomes more – more picky about which companies and which credits it likes and which ones it doesn't like. I think that third scenario is where the puck is headed longer term. But my guess is we're going to go through scenario one to get to scenario three. Very helpful. Thanks, David.

Your next question comes from the line of Ethan Kaye of Lucid Capital Markets. Please go ahead.

Hey, guys. Thanks for taking my questions here. Firstly, in your prepared remarks, you suggested you're, you know, planning for a challenging 2026. Just hoping you can kind of dig into that a bit. Is that, you know, more broadly, you know, related more broadly to, you know, the leveraged lending sector? Do you also kind of foresee some kind of budding challenges at GBDC? And, you know, is this a commentary on both earnings and credit or, you know, one or the other? Just any expansion on that comment would be helpful.

Sure. So as I mentioned in the prepared remarks, we think that the market environment right now is challenging. So if we're down, it's probably going to go down a little more. spreads are at pretty much a five-year low, and while they feel like they've stabilized some, the back book is still not at the same level that the front book is at. M&A, which everybody went into this year saying, oh, this year it's finally going to happen. We're going to see the breaking of the dam. I'm still seeing a muted M&A environment, and I'd like to see more. I'm I'm not saying it won't happen. I'm saying we haven't seen it yet. And finally, on credit, I think, you know, we are in a credit cycle. And I've been saying this now for many quarters. I think we're seeing elevated levels of credit stress in both the public syndicated market and in the private credit market. And everybody's working through their issues, including us. I think we're well-positioned even relative to the industry. But I think there's been a fair amount of happy talk in the industry, and I want to be very candid with you and with our investors that this is a challenging environment right now. It's harder for us to produce the ROEs that we want to be producing in the current environment than it's been in recent years. That doesn't mean that I'm not optimistic about GBDC's long-term prospects. I am. But I think part of our job is being very candid about when we're in an environment with headwinds and when we're in an environment with tailwinds.

Understood. I appreciate that. And then one other, I wanted to ask a bit about the deployment outlook. I know you kind of just mentioned you're not seeing, you know, a broad recovery in M&A yet. But, you know, I guess if... If you do see that, right, leverage is kind of towards the top of the range and you guys are actively buying back shares here, which looks prudent, but hoping you can give a bit of color on how you're kind of weighing these, you know, competing, you know, capital allocation opportunities in the face of maybe finite capital resources.

So, I think you said it very well. We've got to balance multiple goals. And in the context of shares trading at a meaningful discount to NAV, we will continue to be active in repurchasing shares because we think that's good for shareholders. We also, in the context of portfolio turnover, will be looking for the best opportunities to redeploy that capital and attractive new loans. So, we've got multiple things that we're going to be doing at the same time. We've got to find the right balance.

Okay. Thanks very much.

Once again, ladies and gentlemen, if you would like to ask a question, please press star followed by the number one on your telephone keypad. And your next question comes from the line of Robert Dart of Raymond James. Please go ahead.

Hi, guys. I hate to stick on kind of the software theme, but what do you think the risks are of sort of unknown unknowns? I mean, when you lay out the case of your moats, as everybody's calling them, proprietary entrenched software, sticky software, proprietary data, et cetera, what are the risks? from AI that those moats turn out to be not as deep as they are perceived to be at the moment. It seems like a market-wide phenomena that the same moats are indicated by you and your competitors. And what's the, to put it bluntly, AI is, AI agents are quite good at scraping data and using it for their own purposes. So, proprietary data might not stay proprietary in some cases. So, what are the risks you think that those moats evaporate given the pace of AI? And to your point, some of it's accelerating faster than experts would have thought a couple years ago. Maybe it's going to be better at building bridges across those moats two years from now than you currently think.

So, great question, Robert. Let's, again, think about this across a couple of different scenarios. So, let's think about a scenario in which AI advances continue to be rapid. In those scenarios, where you have enterprise players with lots of customers, deeply embedded relationships, the risk that those companies have starts with slower growth. So, the first impact that one would imagine from this would be lower equity valuations associated with lower growth trajectories, and that would be lower growth in terms of new logos, and it would be lower growth in terms of bleeding of some existing customers. The second level of risk would be that the risk would be so significant that not only would you see it in slower growth, you'd see it in some negative growth. You'd see it in some reduction in revenues. I think, again, for good software companies, it's quite unlikely that you're going to see immediate collapse. You're going to see a melting as opposed to a meltdown. And then the third scenario would be the meltdown scenario. It would be AI comes up with a capability that's so strong relative to the incumbent product that it effectively replaces the incumbent product in a short period of time. I think that's the least likely of the three scenarios. So as we think about what's going on right now, what this argues for, what my – three buckets argue for is that we likely should be focused first on equity market reaction and then second on credit market reaction because in order for AI to be a real problem for credit markets, You know, we need to see scenario two or scenario three. We've got to blow past scenario one, at least in a significant number of cases.

I appreciate that, Kyle. Thank you. The kind of follow-on to that, to that point, is to your point, if it's scenario one – and you're in these assets for, you know, they might be slower growing and the equity holders might lose capital, but you may have the opportunity to, may or may not have the opportunity to get out. Would you expect going forward to do less software deals, given, you know, is the risk return, because they still seem to be, the ones that are getting done are still priced pretty tight, it's widening a little bit. But is that, given the risks are potentially so outsized, do you expect there to be a shift in kind of the amount of software you'd want to onboard into the portfolio over the next five years, Colin?

So my expectation, Robert, is that the market's going to reprice risk. So it's hard to answer that question without making an assumption about how the market digests information and what that means in terms of go-forward spreads. The broadly syndicated market has repriced spreads. You know, you're not going to see new software deals come out at the same spread levels that existing borrowers are at, where their loans are trading at 95 or 90 or 85. Markets saying those deals are underpriced. So I think it's hard to answer your question without seeing some more data about how private markets digest what's going on right now and in particular what that means for pricing and structure and leverage in new deals. I will be surprised if Gallup Capital doesn't continue to be a leading software lender. We're very good at this. We've got a a deep set of relationships with the sponsors who are best in the business at this. But in terms of answering your question about a specific capital deployment goal, I think it's premature to answer that.

Got it. Thank you. Fair enough.

Your next question comes from the line of Paul Johnson of KBW. Please go ahead.

Good morning. Thanks for taking my questions. Just sticking with software here, can you just maybe talk about, in general, software trends, maybe sort of like pre-AI disruption risk or X, you know, kind of the disruption risk that's, you know, getting priced into the market? Today I ask is the Gallup-Altman Index or the middle market index that you guys put out, I noticed that the tech industry sector revenue growth has kind of fell off over here over the last several quarters and, you know, what has been the underlying trend, I guess, broadly for that industry? Maybe kind of what's driving the slower growth there. Sure. Thanks, Paul. It's a great question and I think important for us all to be focused on some of those trends in addition to be thinking about longer-term AI risks. So if we look at the Gallup-Altman Index numbers in sequence, what we see is that the technology slash software area has been, over time, persistently growing faster than the rest of our portfolio. Having said that, like the rest of the portfolio, we've seen some slowdown in year-over-year growth in that sector. And if you then kind of peel back this onion some more, what we see is selectively a slowdown in bookings. And this isn't just true in the Gallup Capital portfolio. I think across software in both larger companies and midsize companies, we've seen over the course of the last two years some slowdown in new bookings trends. Said differently, corporate clients are moving more slowly to adopt and pay for new software products relative to the prior period. So why is that? Well, it's hard to figure out that next layer of the onion because there's actually a bunch of different reasons. Part of it is companies dealing with cost pressure. Part of it is companies digesting prior investments in tech. I don't think it's a generalized move away by corporate customers, a generalized move away from adopting new software applications and using them to improve their businesses. I think that's continuing. I think we're seeing a bit of a cyclical pattern right now where software bookings are lower than they've been, and I think that will likely come back. Very helpful, David. Appreciate that. And maybe just last question on your portfolio at GBDC. I was wondering if you can kind of share, if possible, you know, how much of the portfolio or of the software book, you know, is ARR, you know, based structures, and I guess any additional color on that in terms of, you know, conversions and companies near cash flow break even, that type of thing. And then maybe more broadly as well, just, you know, how you think about kind of the defensive structure, the thesis around that with those types of deals kind of given the risk increasing today. Sure. So just for those of you who are not experts, what Paul's referencing is loans called ARR loans or recurring revenue loans where the rubric for the credit underwriting is not traditional debit coverage or interest coverage data. It would be more based on revenue multiples and expectation of that turning into EBIT in a few years' time. So, we were early originators of ARR loans, as you know, about 10 years ago. We've actually reduced the exposure to ARR loans in recent years as pricing has gotten tighter in those loans, and we think the attractiveness of them has reduced. So the proportion of the GBDC portfolio that's in ARR loans has actually gone down meaningfully in recent years as a lot of our older ARR loans converted to EBITDA loans, converted to traditional loans, and as we've reduced the volume of new ones. I will look to see after this call, Paul, at what we've disclosed on this and what we can disclose, but that's the generalized trend. Now, I do think in addition to spreads being tighter, that in an environment in which bookings trends have, you know, gone down, I think ARR loans are tougher. Not to say they're all good or all bad, but, you know, this is always a situation where you need to judge individual loans on their merits. But, you know, it's a more challenging, it's been a more challenging space. Got it. Once again, very helpful, David. Appreciate it. It's all for me.

There are no further questions at this time, and with that, I will now turn the call over to David Pollard for closing remarks. Please go ahead.

Thank you, Aubrey. I just want to thank everybody for their time this morning. As always, if you have any questions that we didn't get to today, please feel free to reach out, and we look forward to following up with you next quarter.

Ladies and gentlemen, this concludes today's call. We thank you for participating. You may now disconnect your lines.