Logan Ridge Finance Corporation

Good morning and welcome to the Logan Ridge Finance Corporation's third quarter-ended September 30, 2024 earnings conference call. An earnings press release was distributed Thursday, November 7, after the close of the market. A copy of the release along with a supplemental earnings presentation is available on the company's website at www.loganridgefinance.com in the Investor Resources section and should be reviewed in conjunction with the company's Form 10-Q filed with the SEC. As a reminder, this conference call is being recorded for replay purposes. Please note that today's conference call may contain forward-looking statements which 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, such as a result of a number of factors, including those described in the company's filings with the SEC. Speaking of today's call will be Ted Goldthorpe, Chief Executive Officer, President and Director of Logan Ridge Finance Corporation, Brandon Satorin, Chief Financial Officer, and Patrick Schaefer, Chief Investment Officer. With that, I would like to turn the call over to Ted Goldpor, Chief Executive Officer of Logan Ridge Finance Corporation. Please go ahead, Ted.

Good morning.

This is the quarter 2024 earnings call. As mentioned, I am joined today by our Chief Financial Officer, Brandon Satorin, and our Chief Investment Officer, Patrick Schaefer. Following my opening remarks, Patrick will provide additional details on our investment activity to date, and Brandon will walk through the financials. Before Brandon and Patrick provide more details on our portfolio and financials, I would like to discuss a few key highlights for the quarter. During the third quarter, we successfully exited our largest investment, nth-degree investment group, for $17.5 million in cash, which was $2 million above its previously reported fair value as of June 30, 2024. in exchange for all of our equity interests. The sale of this equity investment is a transformative event for the company as it represented 7.9% of the company's investments at fair value prior to the sale. The proceeds of which can now be redeployed into interest earning assets originally by BC Partners credit platform, which will significantly improve the long-term earnings power of our portfolio. The rotation out of legacy equity portfolio has been a key component of our turnaround strategy for Logan Ridge since Mount Logan management took over as a company's investment advisor in July of 2021. We are proud to have taken a major step forward towards this goal. Additionally, the underlying credit performance of our portfolio has remained stable with no new investments being placed on non-accrual status during the quarter. The strength of the company's financial position and the outlook for long-term earnings power of the portfolio has allowed the company to declare a fourth quarter distribution of $0.36 per share. The dividend has doubled compared to the $0.18 per share distribution we declared in the first quarter of 2023 when we reintroduced our quarterly dividend, highlighting the company's successful turnaround story since we took over management back in July of 2021. Additionally, during the quarter, we amended and extended our revolving credit facility with KeyBank. The new attractive terms, which reduced the applicable margins and extended the maturity date of both the reinvestment and amortization periods, have reduced our overall cost of capital, creating meaningful additional borrowing capacity and providing us with further financial flexibility. Regarding the private credit markets, specifically the core middle market, which we define as companies generating between 10 and 50 of EBITDA, activity levels continue to be elevated relative to 2023, the majority of the activity has consistently been from refinancings, add-ons, or amended and extended transactions that most often result in lower cost of capital for our borrowers and extended maturities. While true and vile financings have remained at depressed levels through 2024, we continue to believe that a combination of dry powder, sponsors looking to return capital to LPs, and the ongoing rate cuts by the Fed are all tailwinds to activity in our sector. Looking forward to the final quarter of 2024 and into 2025 as we navigate through economic uncertainty and a dynamic interest rate environment, remain confident in our prudent investment strategy, strong pipeline, and experienced management team. We continue to see attractive opportunities in our pipeline and believe we remain well-positioned to continue to deliver positive returns to our shareholders through the diligent deployment of capital, continued rotation out of the legacy equity portfolio, by leveraging the attractive terms of our amended credit facility. With that, I will turn the call over to Patrick Schaffer, our Chief Investment Officer.