CION Investment Corporation

greetings and welcome to the scion investment court fourth quarter and fiscal year and 2021 earnings conference call at this time all participants are in a listen only 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 that this conference is being recorded i will now turn the conference Over to our host, a representative from the company, Jehei Linford. Thank you. You may begin.

Thank you. Good morning and welcome to Scion Investment Corporation's fourth quarter and fiscal year-ended December 31st, 2021 earnings conference call. An earnings press release was distributed earlier this morning before market opened. A copy of the release, along with a supplemental earnings presentation, is available on the company's website at www.scionbdc.com in the investor resources section and should be reviewed in conjunction with the company's Form 10-K 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 as a result of a number of factors, including those described in the company's filings with the SEC. We caution you to not place undue reliance on forward-looking statements which reflect management's view only as of the date of this call. Scion Investment Corporation undertakes no obligation to update or revive any such forward-looking statements unless required by law. Speaking on today's call will be Mark Gatto and Michael Reisner, Scion Investment Corporation's Co-Chief Executive Officers, Greg Bresner, President and Chief Investment Officer, and Keith Rand, Chief Financial Officer. With that, I would now like to turn the call over to Mark Gatto. Please go ahead, Mark.

Thank you, Jihei. Good morning, everyone, and thank you for joining us. Before we begin, I would like to take a brief moment and mention that we recognize the tragic events unfolding in Eastern Europe and that above all, our thoughts are with those that are affected by these events. We have been monitoring the rapidly evolving situation and currently, We are not aware of any direct impact to any of our portfolio companies at this time. While these events have impacted and will continue to impact the U.S. and global economies and may create some headwinds for the direct lending industry, we believe our business model and approach to lending should serve us well in this type of environment. With a portfolio consisting of 92% first lien senior secured investments, and a diversified origination strategy, it is our view that our portfolio will demonstrate its resiliency during these times and that our ability to originate quality investment opportunities will continue to be an important source of differentiation. For our call today, I will start with an overview of our fourth quarter and year-ended December 31st, 2021 results. Michael will continue this discussion, focusing on our recently announced corporate developments. Following that, Greg will describe our investment activity during the quarter and full year, and Keith will provide additional detail on our financial results. We'll then open the call for Q&A. 2021 was a transformative year for Scion. Following nine years as a non-traded BDC, we listed company shares on the New York Stock Exchange on October 5th, following significant preparation to be a more public-facing company. As we consider the future and pathways to grow Scion at the end of 2021, we were pleased to announce two corporate developments. First, we announced we received shareholder approval to reduce our asset coverage ratio requirement from 200% to 150%. which will provide Scion the same flexibility and access to increased leverage as our peers. Additionally, we announced the formation of a new joint venture with a longstanding partner, Eagle Tree Capital, to pursue and manage subordinated and other high yielding investments. My partner, Michael, will provide more detail on these topics in his remark. Turning back to 2021. Throughout the year, we continued to deliver solid results from the investment side. We ended the year with a net asset value of $16.34 per share compared to $15.50 per share at the end of 2020 and generated a total return on equity of 13.5% for our shareholders. We recorded new investment commitments of $949 million, funded $920 million, and grew our investment portfolio by 11.4% from 1.5 billion at year end 2020 to 1.7 billion at year end 2021. Furthermore, over the course of the year, we materially increased the percentage of first lien debt investments from 82% of our portfolio at year end 2020 to 92% of our portfolio at year end 2021. thereby improving the risk profile of our investment portfolio without diminishing the net investment income profile of our portfolio. We were pleased to have achieved our solid portfolio growth, net investment income generation, and distribution payments, all while maintaining a target leverage range of only 0.8 to 0.9 times during the year. This morning, we reported fourth quarter net investment income of 32 cents per share. This resulted in full year net investment income of $1.31 per share, which exceeded our distributions totaling $1.26 per share for the full year. Net asset value at year end was $16.34 per share compared to $16.52 at the end of the third quarter and reflects a special distribution of 20 cents per share that was paid in December of 2021. Overall, investment activity was strong in the fourth quarter and allowed us to deliver a consistent level of investment income. In Q4, new investment commitments totaled $353 million and sales and repayments were $319 million. Notably, in this heavy repayment environment, we took advantage of the robust inflows into the syndicated loan market and rotated out of previously less liquid syndicated credits and utilized the proceeds to fund more attractively yielding middle market investments, which we expect to provide incremental benefit to our future net investment income. Greg will provide some additional detail on this shift in his remarks. The overall credit quality of the portfolio remained consistent quarter to quarter with 85% of total investments at fair value rated a one or two, our highest internal credit ratings, approximately the same percentage as the third quarter. During the quarter, we added new investment to non-accrual status. As a result, investment on non-accrual status amounted to 0.72% total investments at fair value and approximately 2.5% at amortized cost, remaining relatively consistent with the prior quarter. As mentioned, in 2021, we paid total cash distributions of $1.26 per share, inclusive of a special distribution of 20 cents per share in December. Taking into account the distributions paid through 2021 plus the change in net asset value per share, we are pleased that our total return on equity for the year was 13.5 percent. These returns were driven primarily by consistent net investment income generation and mark-to-market valuation increases. We are particularly pleased with this return performance in light of over $3 million of non-recurring expenses incurred by the company related to the listing of the company shares on the New York Stock Exchange and seeking shareholder approval related to the reduction of our asset coverage ratio in December. Looking ahead in 2022, we expect a more normalized level of operating expenses. On March 8, 2022, we approved a base quarterly distribution for the second quarter of 2022 of 28 cents per share. This regular distribution is consistent with the first quarter of 2022 distribution of 28 cents per share. that was previously announced. With that, let me turn the call over to Michael.