Portman Ridge Finance Corporation

Welcome to Portman Ridge Finance Corporation's third quarter 2024 earnings conference call. An earnings press release was distributed Thursday, November 7th after market close. A copy of the release along with an earnings presentation is available on the company's website at www.portmanridge.com in the investor relations section. and should be reviewed in conjunction with a company's Form 10Q filed on November 7th 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 as a result of a number of factors, including those described in the company's filing with the SEC. Portman Ridge Finance Corporation assumes no obligation to update any such forward-looking statements unless required by law. Speaking on today's call will be Ted Goldthorpe, Chief Executive Officer, President and Director of Portman Ridge Finance Corporation, Brandon Satoran, Chief Financial Officer, and Patrick Schaffer, Chief Investment Officer. With that, I would now like to turn the call over to Ted Goldthorpe, Chief Executive Officer of Portman Ridge.

Good morning, and welcome to our third quarter 2024 earnings call.

I'm joined today by our Chief Financial Officer, Brandon Satoran, and our Chief Investment Officer, Patrick Schaefer. Following my opening remarks on the company's performance and activities during the second quarter, Patrick will provide commentary on our investment portfolio and markets, and Brandon will discuss our operating results and financial condition in greater detail. On November 7th, 2024, Portman Ridge announced its third quarter 2024 results And following the strong earnings we saw in the first half of 2024, the company's third quarter earnings were temporarily impacted by prudent cash and portfolio management initiatives prior to the successful refinancing of the 2018-2 secured notes. I'm very pleased with the work we did on the right side of the balance sheet and the substantial improvements we made to the company's debt capital structure. Specifically, the company extended the maturity of the JPM credit facility while also reducing the spread by a full 30 basis points. Further, using the upsized and lower cost JPM credit facility, the company refinanced the remaining $85 million of a 2018-2 secure notes at the end of August, which resulted in further net spread savings of approximately 28 basis points. On a run rate basis, the impact from reduced spreads should result in approximately $265,000 reduction of interest expense relative to Q3 results, or $0.03 a share. With that in mind, we continue to believe our stock remains undervalued, and thus we continued repurchasing stock during the third quarter under our Rule 10b-5 stock repurchase program. Specifically during the quarter ended September 30, 2024, the company repurchased 33,429 shares in the open market for an aggregate cost of approximately $600,000, which is accretive to NAV by one cent a share and reinforces our commitment to increasing shareholder value. Additionally, the Board of Directors approved a 69 cent per share distribution for the fourth quarter of 2024, which represents 13.6% annualized return on net asset value, amongst the highest in the BDC space. Regarding the private credit markets, and specifically the core middle market, which we define as companies generating 10 to 50 EBITDA, Activity levels continue to be elevated relative to 2023, but the majority of activity has consistently been from refinancings, add-ons, or amended extend transactions that most often result in lower cost of capital for our borrowers and extended maturities. While true new money buyout financings have remained at depressed levels throughout 2024, we continue to believe that a combination of dry powder, sponsors looking to return capital to LPs, the ongoing rate cuts by the Fed, are all tailwinds for our sector. Looking ahead to the final quarter of 2024 and the beginning of 2025, with the company's balance sheet fortified by the amended JP Morgan credit facility, we expect to be active in the market and net deployers of the company's capital, which we believe will restore net investment income back in line with more normalized levels. Above all, despite the current economic activity and a dynamic interest rate environment, we remain confident in our prudent investment strategy, strong pipeline, and experienced management team and believe the company remains well-positioned with our strong spillover income to continue to deliver positive returns to our shareholders. With that, I will turn the call over to Patrick Schaefer, our Chief Investment Officer, for a review of our investment activity.