Bain Capital Specialty Finance, Inc.

Greetings. Welcome to the Bain Capital Specialty Finance First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listening mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Sloan Bowen, Investor Relations. Mr. Bowen, you may begin.

Thank you. Good morning. Last night we issued our earnings press release and presentation of our quarterly results, a copy of which is available on Bain Capital Specialty Finance's investor relations website. Following our remarks today, we will hold a question and answer session for analysts and investors. This call is being webcast and a replay will be available on our website. This call and webcast are the property of Bain Capital Specialty Finance and any unauthorized broadcast in any form is strictly prohibited. Any forward-looking statements made today do not guarantee future performance and actual results may differ materially. These statements are based on current management expectations, which include risks and uncertainties, which are identified in the risk factors section of our annual report in Form 10-K that could cause actual results to differ materially from those indicated. Bain Capital Specialty Finance assumes no obligation to update any forward-looking statements at this time unless required to do so by law. Lastly, past performance does not guarantee future results. And with that, I'll turn the call over to our President and Chief Executive Officer, Michael Ewald.

Good morning, and thank you for joining us for our first quarter 2019 earnings call. As Sloan mentioned, my name is Michael Ewald, and today I'm joined by our Vice President and Treasurer, Mike Boyle, and our Chief Financial Officer, Sally Dornis. As we discussed on our inaugural public earnings call last quarter, our goal for BCSF is consistent with Bain Capital Credit's Senior Direct Lending Strategy. which is to generate superior risk-adjusted returns through rigorous underwriting that leverages the breadth and depth of the full Bain Capital Credit team and that seeks to identify investments with first or second liens against collateral and strong credit structures that insulate us as lenders and you as shareholders. As most of you know, Bain Capital Credit is the debt investing arm of Bain Capital, a large privately held alternative asset manager with over $100 billion of assets under management. The credit business represents over $39 billion of those assets, and the private credit group, which I head and which includes BCSF, manages over $7 billion. The credit business was founded in 1998 and has been investing in the middle market, which we define as companies with $10 to $150 million of EBITDA since its inception. At the end of the first quarter of 2019, BCSF's portfolio represented $1.8 billion invested across 32 different industries, and 133 portfolio companies with a current weighted average yield of 8.8%. Approximately 82% of our portfolio is invested in what we refer to as first dollar risk. 64% of that is in traditional first lien loans with another 18% in Unitranche loans through our ABCS partnership with Antares Capital. Similar to last quarter, we continue to have no non-accruing loans in our portfolio. As you'll recall, we received shareholder approval in February to reduce the company's required minimum asset coverage from 200% to 150%. Further to this point, on Monday we announced that we completed the consolidation of our interest in the ABCS Unitron Joint Venture onto our balance sheet on April 30, 2019. We believe this change is in the best interest of our shareholders and a recognition of the success of the program to date. I would like to provide some additional background on the rationale for this decision. First, given the reduced asset coverage requirement provided under the SPCAA, we believe the utility of an off-balance sheet financing vehicle for these assets has been diminished. Second, as we outlined in our press release and 8 , consolidating the assets and liabilities of our interest in the JV onto our balance sheet removes our equity interest in ABCS from the 30% non-qualifying basket of our assets. a threshold that we have nearly been limited by in the past, and places these qualifying assets onto our balance sheet. Freeing up this capacity allows us the ability to grow other investment opportunities that would fall into the 30% bucket. In particular, we intend to continue to invest in deals sourced by our European and Australian offices, improving the geographic diversification of the portfolio. In addition, we may continue to expand into other strategic partnerships within the direct lending realm. Both of these initiatives, we believe, will provide attractive risk-adjusted returns for our investors. Third, as you may recall, Bain Capital Specialty Finance has received exemptive relief from the SEC, allowing us to invest alongside other funds and other accounts managed by Bain Capital Credit. Following the consolidation of our interest in the JV, other Bain Capital Credit funds and accounts will be able to invest alongside the program in Unitranche loans. Given the success of the program and our view of where we see risk-adjusted returns that are attractive, we believe the ability to speak for larger hold sizes, currently the program can speak for loans of up to about $350 million, will allow us to lead some bigger deals while still influencing terms and conditions. Lastly, we plan for this transaction to be fee-neutral for our shareholders. As you'll recall, we already amended our annual base management fee from 1.5% to 1%, on any amount of assets attributable to leverage that decreases the company's asset coverage ratio below 200%. Furthermore, we intend to waive management fees on assets acquired in conjunction with the ABCS joint venture consolidation throughout 2019. As of the end of the first quarter, our debt-to-equity leverage ratio increased to 0.9 times compared to 0.75 times at the end of 2018. Mike Boyle will provide some additional color on our debt and liability management. We are also pleased to announce that our Board of Directors has approved a $50 million company-sponsored share repurchase program. Under the new program, we can repurchase up to $50 million of outstanding common stock in the open market. We believe this program can be an effective approach to driving shareholder returns and is a further demonstration of our commitment to shareholder alignment. Before I turn the call over to Sally and Mike to go through our financial results and investment Let me comment briefly on the market environment and what we're seeing there. Following the volatility experienced in the fourth quarter, the broadly syndicated loan market, one of our reference markets, retraced part of its decline, returning to 96.4 at the end of March from a low of 94 at the end of December and a baseline of 98.6 as of September 2018. In comparison to the fourth quarter, where financing activity continued, albeit at wider spreads, given the long timeline for existing deals in the pipeline, Activities slowed in the beginning of the first quarter as participants took stock and re-evaluated market consensus. For us, this trend manifested itself as strong net new fundings in January and February, but net repayments in March. Mike Boyle will also provide greater detail on our originations, but looking forward, our pipeline of investment opportunities remains robust. Now on to Sally.

Thank you, Mike, and good morning, everyone. We are pleased to report our first quarter 2019 results. Our net investment income was $21.2 million, or 41 cents per share, for the first quarter of 2019, which is an increase in net investment income of 7% compared to the fourth quarter of 2018 net investment income of $19.8 million. The quarter-over-quarter increase was due to total investment income increasing approximately $6.2 million, or 18%, from $33.7 million to $39.9 million as we rotated out of lower yielding assets to higher yielding assets, replacing investments having a weighted average yield of 7.7% with investments having a weighted average yield of 8.4%. Our gap earnings per share for the first quarter of 2019 were $0.76 per share compared to negative $0.21 per share for the fourth quarter of 2018. This quarter-over-quarter increase was driven by the net change in unrealized appreciation of $15.3 million and net realized gains of $2.8 million, driven by the partial rebound we experienced that Mike mentioned. Our total expenses for the quarter increased $4.6 million to approximately $18.6 million, compared to $14 million in the fourth quarter. Included in this is interest expense that increased due to our usage of our credit facilities as we continued to grow our portfolio in Q4 2018 rolling into Q1 2019 from $7.9 million to $10.5 million. Additionally, as announced on February 19th, the company entered into a new $350 million credit facility at LIBOR Plus 160 with Citibank. Our advisor voluntarily waived its right to receive the base management fee in excess of 1% and waived a portion of the incentive fee. For the three months ended March 31st, our management and incentive fee net of waivers was $4.5 million and $2.1 million, respectively, compared to a management fee and incentive fee net of waivers of $3 million and $2.2 million for the three-month end of December 31st, 2018. In addition, I would like to reiterate that we amended our advisory agreement, which now includes an incentive fee cap and a three-year look-back provision, which took effect on January 1st, 2019. Moving over to our balance sheet, As of March 31st, our investment portfolio at fair value totaled $1.8 billion. The yields on the portfolio increased slightly quarter over quarter. The weighted average portfolio yield was 8.8%, and the weighted average portfolio yield excluding our ABCS investment was 7.8% as of March 31st, 2019. Moving to the right side of the balance sheet, total net assets were $1 billion as of March 31st. NAV per share was $19.81 compared to $19.41 in the fourth quarter. The increase was primarily due to the net realized and unrealized gains during the period. As of March 31st, we had total principal debt outstanding of $917 million comprised of Goldman Sachs and Citibank credit facilities along with our 2018-1 notes. Our debt-to-equity ratio, inclusive of trade payables, was 0.92 times, which is an increase from the fourth quarter of 0.75 times. As previously announced, on February 1st, we received stockholder approval for a reduced asset coverage requirement from 200% to 150% effective February 2nd. As Mike Ewald mentioned, and Mike Boyle will detail further in his remarks, this provides us the ability to restructure our ABCS joint venture and consolidate the results in our consolidated financial statements as announced on May 6th. Finally, we are pleased to announce that our board declared a second quarter dividend of 41 cents a share. The second quarter dividend is payable on July 29th, 2019 to stockholders of record on June 28th, 2019. I appreciate your time and attention. I will now turn the call over to Mike Boyle, our Vice President and Treasurer, to walk through our investment portfolio and ABCS restructure in more detail.

Thanks, Sally. Good morning, everyone. I'll start by spending a few minutes reviewing our first quarter activity, and I will also provide an overview of our current investment portfolio and our views on construction, including our recently announced ABCSJV consolidation. Lastly, I'll provide some more detail about our liabilities, including our current financing facilities and liquidity resources. In the first quarter, we invested approximately $276 million across 16 new portfolio companies. During the same period, we realized approximately $192 million through repayments and realizations. This net investment pace of $83 million is reflective of the first quarter investment environment. Our investment pace in the first quarter slowed somewhat as many processes launched later than expected due to volatility at year end. While still early on, we've seen good momentum heading into the second quarter, having funded over $60 million in new originations in early April. It is our expectation that as markets continue to find equilibrium, new loan volume will continue to increase. As of the end of the first quarter, the fair value of our investments was $1.8 billion versus $1.7 billion at December 31, 2018. In terms of composition, 82% of our portfolio is invested in first lien loans. This includes our equity investments through ABCF, where the portfolio consists of first lien Unitron loans to middle market businesses. Pro forma for the consolidation of our interests, first lien loans would have comprised 86% of the portfolio as of March 31st, 2019. Our focus on constructing a portfolio with primarily first dollar risk reflects our current views that we are late in the credit cycle. We believe that the best way to mitigate downside risk as a lender in today's economy is to prioritize investments representing that first dollar of risk in capital structures, maintain strong lender protections like covenants. Eighty-two percent of the current portfolio has financial maintenance covenants. We also seek to retain effective voting control of the debt tranches we're invested in and favor industries that do not cycle with the broader economy. Our top three industry exposures are high-tech, aerospace and defense, and business services. Diversification is a central tenet of our portfolio with 133 companies in the portfolio as of Q1 2019. In our hunt for attractive risk return, we look at developed economies across the globe to drive investment ideas. Currently, 9% of the portfolio is invested across Europe with a current focus in the UK, Ireland and Scandinavia. These investments are sourced from our London office which was established in 2002 and our Dublin office established in 2014. With the breadth of Bain Capital Credit, we are constantly evaluating the attractiveness of the US direct lending market relative to others and capitalizing on these global opportunities within the confines of the 30% non-qualifying asset bucket permitted for BDC. Turning to yield, the weighted average gross yield of our investments was 8.8 at quarter end compared to 8.7 on December 31st, 2018, with 96.1% of investments in floating rate debt and 3.9 in fixed rate. We believe our focus on floating rate assets positions the company well for various interest rate environments. From a portfolio quality perspective, there were no investments on non-accrual status at quarter end. We rate the investments in our portfolio at least quarterly on a scale of 1 to 4, with 1 being the highest possible risk rating and 4 the lowest. As of quarter end, 99% of our portfolio of fair value was rated a 1 or a 2, reflecting that the majority of our portfolio continues to perform in line or above our expectations at underwrite. Over the course of the first quarter, our marks in the portfolio largely recovered in line with our reference markets, reflecting tightening spreads in the broadly syndicated loan and high-yield markets. More specifically, the average price of a loan in BCSF's portfolio was marked up by 75 basis points over the quarter, from an average price of 97.4 up to 98.1. We would expect to see continued recoveries in our marks should our reference markets continue to move toward their longer-term average levels. As Mike mentioned earlier, on Monday, we announced the consolidation of our interest in the ABCSJV onto our balance sheet on April 30, 2019. We believe this changed in the best interest of our shareholders and a recognition of the success of the program to date, and well aligned with our focus on constructing a senior-focused portfolio. As previously highlighted, from a portfolio construction and regulatory perspective, given the reduced asset coverage requirement provided by the SBCAA, we believe the utility of an off-balance sheet financing vehicle for these assets has been diminished. Further to this point, it is our belief that we can utilize our 30% non-qualifying basket in a manner that drives greater value to shareholders. We intend to use this capacity to further pursue two discrete investment objectives currently underway. First, we believe greater geographic diversification from Europe and Australia will provide a source of differentiated return. Second, over the long term, we continue to believe strategic partnerships to be an effective approach to accessing strong risk-adjusted return and may seek to explore further opportunities in that segment. We plan for this transaction to be fee-neutral for shareholders. Therefore, we intend to waive management fees on incremental assets acquired in conjunction with the ABCS-JV consolidation throughout 2019. Lastly, I'll provide some pro forma metrics to give you a greater sense of the earnings power of the BDC following the consolidation. Based on the company's financial standing at quarter end, the total fair value of our investment portfolio with our consolidated ABCS interest would have been $2.4 billion across 133 portfolio companies. The weighted average yield of the debt assets on balance sheet increases as a result of this transaction by 20 basis points, from 7.8% to 8.0%. The leverage profile of the company would have been approximately 1.4 pro forma for the consolidation, within our target leverage range of 1 to 1.5. Turning to the liabilities of the company, at quarter end, the company had $917 million in principal debt outstanding, As a ratio to the net asset value of the company, our leverage ratio was 0.92 times, which includes trade payables. To this end, as we have sought to construct a long-dated floating rate liability profile that is well aligned with our investment strategy, in October 2017, we closed a revolving credit facility with Goldman Sachs, which provides us flexibility and liquidity to meet the ongoing funding needs of the company. September 2018, we issued the 2018-1 notes, through BCC middle market CLO 2018-1, accessing the securitization market for the first time by BCSF. We believe the CLO and securitization market provides compelling financing solutions as we look to diversify our funding sources given the long-dated maturity profile, low weighted average cost of debt, and attractive financing terms that can be found in that market. We are uniquely positioned to access the CLO market with Bain Capital Credit managing 40 CLOs over the course of the last 20 years. As discussed last quarter, on February 19, 2019, we closed a new $350 million credit facility with Citibank as the administrative agent priced at LIBOR plus $160. Lastly, subsequent to quarter end, in conjunction with the recent ABCS-JV transaction, we entered into a $667 million credit facility with J.P. Morgan, the same facility previously utilized for ABCS Unitranche loans. Taken in whole, we believe we have provided a solid foundation for the company to operate within our target leverage profile and are pleased with our continued progress in constructing a well-diversified funding base. Lastly, as Mike mentioned, our Board of Directors approved a new $50 million share repurchase program. Following the IPO and the full utilization of the $20 million 10B51 program provided by our advisor and its affiliates, it was our and our board's shared view that a company-sponsored share repurchase program can be an effective tool to drive shareholder returns. We expect to utilize both programmatic 10b-5-1 and discretionary 10b-18 components so that we're well-positioned to drive value when the trading price of our shares does not reflect the intrinsic value of our company. We have provided further details on the program in our SEC filings. With that, I'll turn the call back over to Mike for closing remarks.

Thanks, Mike. To conclude, we had a solid quarter and believe we are taking further steps to position the company with the best possible foundation to drive shareholder value. While we recognize that we are at the beginning of a new journey as a public company, we believe our investment and portfolio construction decisions are well informed by the experience of the many investment and operating professionals of Bain Capital Credit who have navigated multiple market cycles. I'd also like to take a minute to thank our investors for their support. Many of you have been with us since well before our IPO last fall. And we'd simply like to note our appreciation and reiterate our excitement about what we believe we can do with the BCSF platform and investing strategy as a public company. I'd like to thank you for your time today. Omer, please open the line for questions.

At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. for participants using speaker equipment, it may be necessary to pick up your handset before pressing the start keys. So that we may address questions from as many participants as possible, we ask that you limit yourself to one question and one follow-up. If you have additional questions, you may re-queue and time permitting those questions will be addressed. One moment please while we poll for questions. Our first question comes from Ryan Lynch, KBW. Please proceed with your question.

Hey, good morning. Thanks for taking my questions. Just the first one on the fee waiver through 2019 on assets brought over from the JV. I calculate about $890 million would be consolidated as of March 31st. Can you give an updated number as per the consolidation on April 30th?

So the number, it still rolls forward to that $890 million through April for the consolidation.

Okay. And then I just, I guess my one follow-up, then I'll hop back in the queue. You know, with the consolidation of this, you know, you mentioned, you know, I calculated about 1.45 times leverage. You guys just provided a target leverage range of 1 to 1.5, so you guys are operating at that upper end of that range. So can you just talk about what are your guys' capital plans and fundings look like going forward?

Sure. So we're definitely at the top end of the range. We're still comfortable in that range because if you think about our portfolio, again, it's mostly based on first lien loans. 82% of it is first dollar risk. I think if we were flipped and we had 20% first dollar risk and 80% and more second lien type securities, I think you'd probably see us operating at the lower end of that range, if not actually below that range. So we're comfortable where we are now. In terms of dry powder for going forward, there's still a little room in that range. I think another source is just some churn in sales and repayments in the portfolio. You saw, or we saw anyway, and you will have seen in our filings, that there was a fair amount of that in the first quarter, and we had assumed that that was going to pick up at some point, and it certainly did pick up, so we expect that to be more elevated than it was on a quarterly basis last year, for example. And then the third source, I'd tell you, for additional dry powder, in a sense, is really the opportunity to have some other strategic partnerships within that 30% bucket. So, you know, I think between the three of those, we've still got ample room to operate within that one to one and a half-ish range. Okay. I appreciate the time.

Thanks for taking my questions. Thanks, Ryan.

Our next question comes from Douglas Harder, Credit Suisse. Please proceed with your question.

Hi. This is actually Sam Cho filling in for Doug. You guys mentioned there were delays in the investment processes that led to slower investment activity. Are you able to quantify the amount due to timing that might roll over to the next quarter?

Sure. So we stated in our remarks $60 million was closed in the beginning part of April, and as we think about what was delayed as a result of that, that volatility and push processes, it is about that $60 million amount.

Okay. I missed that. Okay. My follow-up is repayments in the sales were elevated. Did you see that coming, and how should we think about the pacing of that going forward?

Sure.

So it was elevated, particularly relative to prior quarters. What we did see, though, was that the fourth quarter of 2018 was quite slow from a repayment activity perspective with only $43 million of repayments happening that quarter. And so it was largely a pull forward of some of the activity that didn't happen in the fourth quarter there. So as we think about run rate, you know, run rate rages for paydowns, we do think that each quarter somewhere between $100 million and $200 million is a reasonable rate of paydowns in the portfolio.

Awesome. Thank you so much.

Our next question comes from Arun Siganovich, Citi. Please proceed with your question.

Thanks. I think in your AK, you mentioned that your relationship with Antares, you'll continue to have one. How do you think that's going to evolve? I would think that Antares provides a decent amount of potential deal flow opportunities. So maybe you could just talk about how your relationship's going to evolve with them now that you've kind of ended that JV.

Yeah, so thanks, Aaron. Yeah, just to be clear, we haven't ended the JV. It was just that we structured how we're funding it. So from our perspective, as I come and carry this perspective, it's more of an accounting change to a large degree to free up the capacity in that 30% bucket. Nothing's changed in terms of how we work together, how we source deals together, how we underwrite deals together, et cetera. And in fact, you may have seen as recently as yesterday, there was actually a press release on a deal that we closed together through the ABCS joint venture, and there was a couple others over the past few weeks. So from our perspective, from their perspective, nothing's changed. It's really full steam ahead. If anything, this actually opens up more capacity because, again, we're not limited by the 30% bucket. In addition to that, it also allows us to potentially speak for more because we can now bring in some of our other managed funds within the Bain Capital rubric. As I mentioned, we do have the exemptive relief. And so if we can bring in other funds, which we couldn't before when it was a non-consolidated JV equity, we can speak for potentially bigger deals in the marketplace, and we and Antares together think that there's a significant opportunity in, you know, potential unit tranches over $350 million.

Thanks. I appreciate the clarification, and it sounds better than I was thinking. So the question I had was on the decision for what you refer to as fee neutral, so waiving the fees associated with the assets you're bringing on balance sheet through 2019. Post-2019, is it no longer fee neutral? I guess I'm just trying to understand the thought about the increase there because you obviously will have higher assets on your balance sheet.

Yeah, exactly right. And the way we thought about it was these are effectively assets that we've already originated. And by bringing them on the balance sheet, effectively it increases our AUM, so therefore we could charge management fees on that. We didn't think that was particularly shareholder friendly. And so what we're doing here is basically waiving the fees on those assets as they come on the balance sheet, doing that through the rest of 19. And we, again, assume that there'll be some churn and that we'll naturally refill that. And so we would have built up to a larger portfolio over time anyway. What we didn't want to do is just sort of switch on fees for assets that, again, we'd already originated in prior quarters that weren't new because we just didn't think that was fair and right for shareholders.

Okay. Thank you. As a reminder, we are now conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. So that we may address questions from as many participants as possible, we ask that you limit yourself to one question and one follow-up. If you have additional questions, you may re-queue, and time permitting, those questions will be addressed. One moment, please, while we pull for questions. Our next question comes from Sin Oshia, Wells Fargo. Please proceed with your question.

Good morning, and thanks. Just to follow on the dialogue with portfolio, it seems like a bit of reconstruction on what we'll do with the Antares assets and then the 30% bucket. But just kind of, if you could summarize a difference in what the blend will be, assuming these Antares assets, if they go much higher in leverage or spread, as you just touched on, that may be more difficult on the financing side. And then on the new 30% bucket, would that therefore be more perhaps lower risk assets, maybe asset-based type stuff? But I know it's sort of a lot there, but if you could kind of give some color as to a potential shift on how you're thinking of portfolio construction.

Sure. Thanks for the question, Finn. So as I highlighted, we ended up – the average yield of the assets in the portfolio went from 7.8% to 8% as a result of the consolidation. So there is some increased spread by bringing – bringing those assets onto the balance sheet. The financing structure, and we think that part of why we did consolidate was because we think that the Unitron structure continues to be attractive in today's market and that that will be a continued way for us to drive attractive return on the asset side. In terms of liabilities, the J.P. Morgan facility that we have in place to address the Unitronch-specific financings will allow us to continue to grow that program. And so we do feel good that the liability structure we have is durable and will be able to fund the growth that we focused on through that Unitronch product in the future.

And again, that J.P. Morgan facility, as Mike had mentioned earlier, is the same one that's been financing these assets already anyway. So it was a relatively easy change from that perspective.

And last... The last piece of your question, Finn, was just around what other potential uses we could have in the 30% bucket. We have highlighted the opportunity we see internationally, and we think that's a differentiated way for us to drive returns for our shareholders. So we would continue to see that. And to the extent we pursue strategic partnerships, they would be things that are core to the direct lending universe, so something that would stay close to the existing strategy of the current portfolio.

Sure, that's helpful. And then for the Bain Credit member entity, is there a remaining rebate on that of any sort?

Sorry, I'm not sure I get the question in terms of is there a rebate on there?

Yeah, the Bain credit member, is there any different terms they're receiving at this point?

No, if you're talking about some of the internal capital that we hold in the BDC, it's at the same level. management fee and incentive fee structure, which it has to be per SEC regulations, right, as any other shareholder, if that's your question.

Thank you for taking my question.

Our next question comes from Derek Hewitt, Bank of America, Merrill Lynch. Please proceed with your question.

Good morning, everyone. Mike, could you talk about the $0.08 of fee waivers and And really, should we expect this to continue if – I'm assuming if margins don't expand so that you can continue to cover the dividend on a core basis? Or maybe were there one-time items that were impacting the margin in the first quarter that we wouldn't expect going forward?

Sure, Derek. I think the short story is we're still somewhat young in terms of having the structure here, so we continue to tweak it a little bit, everything from changing the liability structure to having that be more efficient to doing things like this ABCSJV collapse. While we're doing it and positioning the BDC appropriately, we also want to make sure that we're also doing right by our shareholders and have an attractive return in there. So you're right, we did waive some fees and have waived some fees historically as well. Certainly our goal is to have NII very comfortably cover the dividend going forward, and I think we're growing into that. We have, again, supported the dividend with some waivers in the past to the extent that we feel like we need to going forward. I think we'll continue to consider that, but certainly the goal would be to have us stand by ourselves there.

Okay. Great. Thank you for answering my question. Sure.

We have reached the end of the question and answer session, and I will now turn the call back over to Mike Ewald for closing remarks.

Thanks, Omer, and thanks, everyone, for taking the time today and having the interest to join the call, and thanks for the questions, too. Always appreciate discussing our strategy with you, and we look forward to catching up again next quarter. Thanks, all.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.