PennantPark Investment Corporation

Thank you. The code you have entered has been accepted. At any time during the program, you may press 5 to return to the beginning, 7 to back up 30 seconds, 8 to pause, and 9 to advance 30 seconds. Again, press 5 to return to the beginning, 7 to back up, 8 to pause, and 9 to advance the program. Welcome to the Pennant Park Investment Corporation's third fiscal quarter 2020 earnings conference call. Today's conference is being recorded. At this time, all participants have been placed in a listen-only mode. The call will be open for a question and answer session following the speaker's remarks. If you would like to ask a question at that time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, press star 2 on your telephone keypad. It is now my pleasure to turn the call over to Mr. Art Penn, Chairman and Chief Executive Officer of Pennant Park Investment Corporation. Mr. Penn, you may begin your conference.

Good morning, everyone. I'd like to welcome you to Pennant Park Investment Corporation's third fiscal quarter 2020 earnings conference call. I'm joined today by Viv Efron, our Chief Financial Officer. Aviv, please start off by disclosing some general conference call information and include a discussion about forward-looking statements.

Thank you, Art. I'd like to remind everyone that today's call is being recorded. Please note that this call is a property of Penn and Park Investment Corporation and that any unauthorized broadcast of this call in any form is strictly prohibited. Audio replay of the call will be available by using the telephone numbers that are being provided in our earnings press release as well as on our website. I'd also like to call your attention to the customer safe harbor disclosure in our press release regarding forward-looking information. Today's conference call may also include forward-looking statements and projections, and we ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these projections. We do not undertake to update our forward-looking statements unless required by law. To obtain copies of our latest SEC filings, please visit our website at PennandPark.com or call us at 212-905-1000. At this time, I'd like to turn the call back to our Chairman and Chief Executive Officer, Art Penn.

Thanks, Aviv. First, we hope that you, your families, and those you work with are staying healthy. We are pleased to report that Penn and Park continues to operate smoothly and effectively and remains committed to working diligently on behalf of our investors. I'm going to spend a few minutes discussing how we fared in the quarter ended June 30th. are the portfolios positioned for upcoming quarters, our capital structure and liquidity, the value proposition of our stock, the financials, and then open it up for Q&A. Despite the challenging economic conditions brought on by the pandemic, we are pleased that we accomplished several key goals this past quarter. We achieved a 7% increase in adjusted NAV as the market stabilized during the quarter. We also achieved our goals of reducing leverage and increasing liquidity. We are particularly pleased with our announcement of the formation of Penn and Park Senior Loan Fund, PSLF, our joint venture with Pantheon, a leading global private markets investor. The initial $35 million equity investment made by Pantheon is in an existing portfolio of loans at an attractive price of $0.94.5 on the dollar. They plan to invest an additional $30 million of equity over time into the JV at fair market value. Additionally, our leverage will decrease by about $245 million, which bolsters our balance sheet. The equity from Pantheon into our platform not only validates the value proposition of our existing portfolio, it also helps scale the Penn and Park platform to continue to be a leading lending partner in the market and creates additional capital for future investment into the attractive new vintage of loans that we are seeing in the market. We believe that our rigorous underwriting process and disciplined approach has successfully positioned us to manage through the challenges ahead. We have an excellent team of talented and dedicated professionals, many with decades of experience managing through multiple economic cycles, to help ensure the best possible outcome in this type of difficult environment. Although we never predicted a global pandemic, as you may know, we have been preparing for an eventual recession for some time. Prior to the COVID-19 crisis, we proactively positioned the portfolio as defensively as possible. Over the past several years, we've generally been moving into first lien secured positions, higher in the capital structure, and into a more diversified portfolio. The overall portfolio was constructed to withstand market and economic volatility. As of June 30th, average debt to EBITDA on the portfolio was 4.6 times, and the average interest coverage ratio, the amount by which cash income exceeds cash interest expense, was 2.9 times. We had only one non-accrual on our book out of 86 different names in PNNT. This represents only 2.5% of the portfolio at cost and 2.3% at market value. We have largely avoided some of the sectors that have been hurt the most by the pandemic, such as retail, restaurants, health clubs, apparel, and airlines, although PNNT does have exposure to oil and gas, which we'll discuss later. The portfolio is highly diversified with 86 companies in 30 different industries. Since inception, PNNT has invested $5.9 billion had an average yield of 12%. This compares to an annualized realized loss ratio of about 24 basis points annually. If we include both realized and unrealized losses, the annualized loss ratio is only 37 basis points annually. This strong track record includes our energy investments, our primarily subordinated debt investments made prior to the financial crisis, and now some portion of the pandemic. You will recall that in 2007, just as today, P&NT was focused on financing middle market financial sponsor transactions. Our performance through the global financial crisis and recession was solid. Prior to the onset of the global financial crisis in September 2008, we initiated investments which ultimately aggregated $480 million. Our playbook then is similar to our playbook now. We focused primarily on the existing portfolio to preserve capital, while raising the bar and becoming even more highly selective on new investments. The investments performed well. Average EBITDA of the underlying portfolio companies fell about 7% to the bottom of the recession. According to the Bloomberg North American High Yield Index, the average high yield company EBITDA was down about 42% during that time frame. As a result, we had few defaults and attractive recoveries on that portfolio. The IRR of those underlying investments was 8%, even though they were done prior to the financial crisis and recession. We are proud of this downside case track record. We've had only 14 companies go non-accrual out of 254 investments since inception over 13 years ago. Further, we are pleased that even when we've had those non-accruals, we've been able to preserve capital for our shareholders. Now let's turn to the outlook ahead in the coming quarters and how our portfolio is positioned. We've been communicating on a frequent basis with management teams and the private equity sponsor owners of our portfolio companies. As mentioned previously, we are gratified that our historical focus has protected us from some of the worst hit areas of the economy such as retail, restaurants, health clubs, apparel, and airlines. We've been pleased with the way our portfolio companies have moved to rapidly adjust costs and have focused on shoring up liquidity. Looking forward to the quarter ended September 30th and beyond, there remains meaningful uncertainty about the timing and pace of the economic recovery and its impact on the portfolio. Nevertheless, where things stand today, our analysis suggests that the vast majority of the companies in our portfolio and the rest of the board members. and reduced all non-essential capital expenditures, expenses and personnel. Revenues and cash flow were materially reduced as the entire industry is conserving liquidity. While hedges in place are helpful, they only partially mitigate the impact of low oil prices. We are encouraged that with a partial reopening of the economy, oil prices seem to have stabilized around $40 and may trend higher in coming months. On the positive side, many of our portfolio companies are in industries such as government services, Defense Contracting, Software, Communication, and Cybersecurity, which collectively comprise a substantial portion of the portfolio and are less impacted by COVID. Our focus has been on traditional middle market companies where we have benefited from terms, covenants, and structures much more attractive to lenders than those of larger companies. These terms enable us to see potential challenges in portfolio companies and be positioned to assist and protect our capital much sooner than the low to no covenant loans which are typical of larger borrowers. Due to the covenant protections we have negotiated, we have been able to be at the table quickly with borrowers. As a result, we have negotiated increased protections, including more equity from sponsors, as well as enhanced economics including amendment fees and increased yields. Inevitably, in certain cases, there may need to be a broader restructuring of a capital stack or two. As we have proven over 13 years in business, we are adept at dealing with and maximizing value over time in these situations. With regard to our financials, I'll give some summary highlights and Aviv will go into more detail. Our net investment income was $0.16 per share above our dividend of $0.12 per share. Our gap in debt-to-equity ratio net of cash was 1.5 times. Regulatory debt-to-equity ratio net of cash, which excludes SBIC debt, was 1.4 times. As many of you know, in early 2009, in response to the GFC, we started marking many of our liabilities, our credit facilities, and bonds to market to better align asset and liability values. This reduces the volatility of NAV in times of market volatility, such as we have today. The additional benefit at that time, and for the ensuing decade, was that it reduced the volatility of our leverage as calculated for regulatory asset coverage tests. Last year, the SEC guided us that for the regulatory asset coverage purposes, they would prefer we mark liabilities at cost, not market, which we now do for that test. As a result, we will be highlighting both GAAP leverage and regulatory asset coverage leverage. With regard to NAV, our GAAP NAV was $7.82 as of June 30th, up approximately 1.4% from the prior quarter, which reflects both the markup of assets offset by the markup of certain liabilities. Assuming liabilities were not marked to market adjusted NAB would have been $7.46 up approximately 7% from the prior quarter. With regard to leverage, we've been targeting a regulatory debt to equity ratio of 1.1 to 1.5 times. Our net regulatory asset coverage ratio of 1.4 times was within the range this past quarter. Pro Farma for the creation of the PSLFJV with Pantheon, our net regulatory asset coverage ratio would be 0.9 times. We had ample liquidity to fund revolver draws and we're in compliance with all of our facilities at June 30th. We have readily available borrowing capacity and cash liquidity to support our commitments. We have a strong capital structure with diversified funding sources and no near-term maturities. We have a $475 million revolving credit facility maturing in 2024. for the Syndicate of Banks, 134 million of SBA debentures maturing in 2026, and 86 million of unsecured notes maturing in 2024. We have been in consistent dialogue with our lenders and are thankful for their support. Regarding our capital structure, over the last few quarters we have discussed two initiatives. One of them has been our PSLFJV that is now in place. Our other initiative is our application to the SBA following up on the green light letter we received for our SBIC3. We are still in process with the SBA. Let's spend a minute on our new JV with Pantheon, PSLF. Pantheon invested $35 million to take a 28% stake in an SPV that previously existed as a wholly owned subsidiary of PNNT. As a result of this JV, the subsidiary and its $245 million credit facility from BNP moved off balance sheet. The portfolio in PSLF is entirely first lien senior secured loans and has a fair value of $356 million. The Pantheon Investment valued the loans at 94.5 cents on the dollar, which is a small discount to the June 30th fair value of 96.6 cents on the dollar. As a result, the transaction is diluted to NAV by about $2 million or 4 cents per share. With the BNP facility moving off balance sheet at par due to the mark-to-market of that credit facility, the additional impact to GAAP NAV is $8 million or 12 cents a share. As a result, the impact on adjusted NAV is $0.04 a share and the impact on gap NAV is $0.16 per share. $22.5 million of the $35 million invested by Pantheon was invested into the SPV and the other $12.5 million was paid in cash to PNNT. The PNNT and Pantheon investments are split into approximately 70% subordinated debt and 30% equity. The subordinated debt has a LIBOR spread of $800 and a LIBOR floor of 1%. Target leverage for PSLF is 1.5 times debt to equity. With regard to our stock price, we believe that the share price of P&NT does not accurately reflect the long-term value of the company. As stated earlier, the average debt to EBITDA of our underlying portfolio as of June 30th was 4.6 times. Translating this into the language of value investors, at the stock price of P&NT today, well below NEV, If every company defaulted, we the shareholders would own a portfolio of companies at a multiple of about two times cash flow. Even in a recession with potential declines in cash flow, value investors should be able to appreciate that attractive low multiple. We continue to review and will look to selectively make new investments. Our focus continues to be on companies and structures that are defensive, have reasonable leverage, covenant protections, and attractive returns. The outlook for new financings is attractive. We believe that middle market lending is a vintage business. This upcoming vintage of loans is likely to be the most attractive we've seen since the 2009 to 2012 time period. Leverage levels are lower, equity cushion higher, yields are higher, and the package of protections, including covenants, are tighter. After enduring about five years of a late cycle market for middle market lending, it is refreshing to have attractive risk-reward available to us. Let me now turn the call over to Aviv, our CFO, to take us through the financial results.

Thank you, Art. For the quarter ended June 30th, the net investment income totaled $0.16 per share. Looking at some of the expense categories, base fees totaled $4.6 million, taxes, general and administrative expenses totaled $1.5 million, and interest expense totaled $8 million. Additionally, the incentive fee of $1.9 million was fully waived. Net unrealized gain on our investments was $29 million, or $0.44 per share. Net unrealized depreciation on our credit facilities was $0.37 per share. Our net investment income exceeded our dividend by $0.04 per share. Consequently, NAD per share went from $7.71 to $7.82 per share. Adjusted NAD, excluding the multi-market of our liabilities was $7.46 per share, up 7% from $6.97 per share. The increase of NAD was primarily due to a 2% valuation increase on our investment portfolio. As a reminder, our entire portfolio, credit facility, and senior notes are marked to market by our board of directors each quarter using the exit price provided by independent valuation firms Securities and Exchanges, or Independent Broker-Dealer Quotes when active markets are available under ASC 820 and 825. In cases where broker-dealer quotes are inactive, we use independent valuation firms to value the investment. Our overall debt portfolio has a weighted average yield of 8.7%. On June 30th, our portfolio consisted of 86 companies across 30 different industries. The portfolio was invested 59% in first-ring secured loans, 18% in second-ring secured debt, 5% in subordinated debt, and 18% in preferred and common equity. 94% of the portfolio have a floating rate, of which 92% have a LIBOR floor. The average LIBOR floor is 1%. Now, let me turn the call back to Mark.

Thanks, Aviv. To conclude, we want to reiterate our mission. Our goal is to generate attractive risk-adjusted returns through income, coupled with long-term preservation of capital. Everything we do is aligned to that goal. We try to find less risky middle market companies that have high free cash flow conversion. We capture that free cash flow primarily in debt instruments, and we pay out those contractual cash flows in the form of dividends to our shareholders. In closing, I'd like to thank our extremely talented team of professionals for their commitment and dedication. Thank you all for your time today and for your continued investment and confidence in us. That concludes our remarks. At this time, I would like to open up the call to questions.

Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star 1 to ask a question. And we'll take our first question from Kyle Joseph with Jefferies. Please go ahead.

Hey, good afternoon, guys. Thanks for having me on and taking my questions. Just wanted to get a sense, or you touched on this a bit here. Obviously, investment activity was light in the quarter, but given what you guys have done with your balance sheet and the increased investment capacity following the JV, you know, how quickly can we expect... Thank you, Kyle.

Look, we're only seeing green shoots right now in terms of kind of new flow. We're encouraged by the new flow that we're seeing. It's very attractive risk-adjusted returns, higher yields, lower leverage, more equity, tighter covenants. So we're encouraged, and it'll be financed through a combination of our existing portfolio getting refinanced, for sure. Some of our existing portfolio is going to turn over over time, as well as judicious and careful, you know, growth. Yes, our leverage is, you know, is at a very nice level, but we want to be careful and thoughtful about, you know, about what we do. So a combination of taking advantage of repayments that we will naturally have, as well as some careful growth, you know, into the future.

Yeah, sure. And then, so balancing that, you know, we've got a lot of moving parts in terms of the JV, the rate environment, anticipated yields on new investments. So just balancing that, can you give us a sense for the outlook on yields for the portfolio, kind of near-term, medium-term, and then longer-term?

Sure. It's a great question. Look, we're seeing yields on new issues Thank you for joining us. is more conservative and has better capital preservation attributes. So, you know, a typical down the middle of the fairway deal today, we think it's probably leveraged four to four and a half times that EBITDA and generates an L plus 600 to L plus 700 kind of Thank you for joining us. Got it. Thanks very much for answering my questions.

Thanks, Carl.

And we'll take our next question from Robert Dodden with Raymond James. Please go ahead.

Hi, guys. So some questions now as it relates to the JV, and congratulations on getting that structure. I mean, to the point in the prepared remarks, obviously everything in that JV is going to be first-leaning. That does mean that the pro forma for the formation of that JV, the mix of asset type, not industry, et cetera, on balance sheet is going to skew much more towards, much further away from first lean than you had been shipping. Can you give us any cut on how you're going to view that approach to the market about whether your thirds on first lean are total growths as almost consolidating the JV portfolio in terms of how you think of the first lean mix in the portfolio or is the intent to just maybe taking up the first lean mix on balance sheet from where it's going to stand pro forma for the JV formation.

Yeah, so a couple of comments in there, Robert, and thank you. First, we're only selling a minority position, 28% of that first lien portfolio. Pantheon wanted to invest more, and that's why we took $35 million today, and they want to invest potentially up to $30 million in the future. So we only wanted to sell a minority piece of that portfolio, Thank you for joining us. and then you talk about what's on balance sheet that also has been mostly pivoting towards first lean in the last couple of years and that's what we're going to continue to do by and large. Not to say that if there's a fantastic second lean deal that's compelling, we're always thinking about that but generally we're looking for capital preservation first and foremost. We do have equity as a chunk of that portfolio that over time We want to exit. The pandemic probably pushed those plans back a year, but we still have some equity that we think is very promising and should have a nice exit year over the coming year or two. Until we exit those equity investments, I think we're going to stay pretty cautious and conservative for the rest of PNNP. and then as we exit those over time, we can assess and see where the market is and see what the pro forma mix of investment should be. But I think we're focused on capital preservation and over the next year or two, exiting those equity investments at as good a price as possible.

Got it. On the topic of those, obviously you gave some color in the prepared remarks with RAM and ETX and suspended drilling, but obviously oil has... Rebounded somewhat stabilized at 40. I think it rose 45 this week even. What would the oil curve, the forward curve, however you want to look at it, need to look like for you guys to kind of reactivate the drilling programs at RAM and ETX? And would they have sufficient capital if those were reactivated? Obviously, RAM has been the query line. Any color you can give on all this.

Yeah, look, we're hunkered down there. I think it's starting at $55 or $60. Then it starts to be a more realistic debate. And I think, to be quite frank, we would look to outside capital or look to exit those investments if and when oil gets back up to those levels. I think at this point we're extending the option as long as we can, and we think we can extend it for quite a while. and should oil kind of hit those levels, and we hope it does at some point, that might be a good time to exit those investments.

And if I can, one more. You said the vast majority of companies have liquidity to pay interest. You're going forward, et cetera. Obviously, the vast majority is more. So those where you've done an evaluation and... and the not vast majority bucket. How are the discussions going with them or sponsors or whatever? What's being done for those where the liquidity situation is still perhaps there's a gap?

It's really thankfully kind of You know, if you would have asked me, Robert, three months ago if we'd be standing here today talking about, you know, up NAV for the quarter and for a minor amount of calls, I would have been shocked and astounded and thrilled and we're here today and Quite frankly, you know, we're in really good shape. I mean, certainly there are going to be some companies, you know, mostly related to travel-related things where there's going to be, you know, some issues. And there it's kind of case by case with the sponsors, whether they put equity in or not, you know, how we amend things, how we get paid to do that. Do we roll up our sleeves and take control? In certain cases, that may make the most sense. So, case by case, it's name by name and what the outlook for the particular name is, what the sponsor is willing to do or we're willing to do, but it's a very, very small, you know, thankfully a very small piece of the portfolio at this point. Now, the disclaimer is we're not out of the woods yet, right? So, you know, we have to see how the fall goes and what the public health issues are and what the vaccine issues are and and all that, but kind of if you say we're kind of midway through the pandemic or I don't know whether you think we're halfway through it, a quarter of the way through it, or mostly through it, you know, we're feeling pretty good about this portfolio. I appreciate it. Thank you. Thank you.

We'll take our next question from Paul Johnson with Keith Bruitt & Litz. Please go ahead.

Hey, good afternoon, guys. Thanks for taking my questions. I have another question on the JV. I'm just curious, how do you plan on structuring the JV? Do you intend on this being solely an equity investment or possibly vaccinating it into a debt investment along with an equity investment?

Yeah, so similar to... Good question, Paul. Similar to our joint venture over at PFLT with Kemper, this JV will be split. It will be about 70% subordinated debt, L plus 800 with a liable floor of 1%, and the rest will be equity. Okay.

Great, thanks for that. And then I guess also on the JV, I realize you probably have definitely just went into your thought process, but just given the higher equity allocation in your portfolio on the balance sheet, I think it's like 18% or so for value. With the formation of the JV, do you expect to have any kind of issue with the limitation in your non-qualified asset bucket?

No, it's a good question. We've got plenty of dry powder in that 30% bucket. The amount of foreign investments is at the minimum, so not really an issue. We think the market will see through this JV like they see through all the other JVs and understand the underlying assets are first lien debt, but in terms of that qualifying asset issue, we don't see a problem with that.

and then a little bit on the modifications and waivers you've been dealing with throughout the quarter. I was curious if that sort of activity has moderated quite a bit so far or if you're still sort of seeing kind of the same level of requests coming in at this time.

Yes, thanks. We have seen, you know, less over time. There was more activity going on in that area kind of in April. We're still seeing some, and we still have some that we're in process on, but the momentum or the pacing of those amendment requests has certainly slowed down as time has gone on.

Thanks for that. And my last question has to do, I mean, you mentioned just the outlook for, you know, potential investments, you know, improving, potentially entering into, you know, a time where there's going to be some very attractive investments. I mean, as far as how you evaluate your current portfolio investments, I'm curious, how do you balance or how do you consider, you know, an investment like Ram Energy? You know, even if the environment today just stayed static and nothing changed, energy is obviously still challenged. Do you ever consider possibly the opportunity cost of holding on to an investment that large versus what could be a pretty attractive area for new capital to be deployed? I say that I also realize it's much easier said than done to make a sale on some of these types of assets, especially in this environment.

Yeah, it's a great question. We think about it all the time, and we, of course, always weigh the existing portfolio against new loans, and we look forward to a day where we can get an attractive exit opportunity on rent.

Okay. Thanks for the question. Thanks.

We'll take our next question from Rick Shane with J.P. Morgan. Please go ahead.

Hey, Eric. How are you?

Okay, Rick. If you exited RAM, what would we talk about on these calls? Talk about the JV, I mean, that's the topic today.

You're right, it would be nice to talk about it.

Yeah, I appreciate that. It's actually a good pivot for me because I did want to talk about the JV a little bit. You know, you've had a couple questions on the JV. You've had some questions on sort of re-entering the origination market. I'm assuming, given where the leverage is on the overall portfolio right now, that the incremental deployment of capital will be through the JV? Is that likely to be the intent?

I think it's going to be both. I mean, the JV and the on-ballot GP and NP can both... both add-on investments. And then I think both the JV and the balance sheet will have repayments. We are starting to see some repayments happening, and of course it's an opportunity to upscale yield on the portfolio. Got it.

And that actually leads to my final question. Given the actual both market structure right now and physical structure in terms of being able to do things like due diligence. Do you think that your origination channels will change a little bit when you do more club syndicated transactions simply because there are advantages to collaborative due diligence?

You're putting a couple different issues together which is a good question. I haven't thought about it that way. You're putting in the Challenge of due diligence question along with, you know, kind of diversification club type, you know, type things. Look, I think, you know, I hadn't really thought about putting the two together, but, you know, it's an interesting way to think about things. Certainly due diligence is more challenging today. Certainly, though, if we want to get deals done, we will figure it out how much we can do on desktop. How much we or how our people who we work with can actually do physical due diligence. How much we're relying on independent third parties like the sponsor or consultants. You can do everything, almost everything, without actually going and kicking the tires. The question is what do you do ultimately to kick the tires? and how best to do that. So I think we can get deals done. I think we can get deals done. I think we are figuring out how to not physically send four people to a factory somewhere. And so I think deals will get done. In terms of the bite sizes, Your kind of question is alluding to the fact that because you can't do full due diligence, everyone wants to be more diversified because you just don't want to take a big bite of something and have a big hiccup. I don't know if that's really what you're thinking about, but I think the market in and of itself is focused on diversification right now. I mean, some of the folks who we partner with have come to us and said, you know, we really do want to just have more diversified portfolio just as a matter of risk management and managing our portfolios. I think that's happened naturally, irregardless of the due diligence question. I don't know if I answered your question, Rick, but if I haven't, please drill in a little bit more.

No, you absolutely did. It is interesting, and it's fascinating how every business is evolving at this point, so I appreciate you taking the question.

Once again, if you would like to ask a question, please press star 1. We'll take our next question from Aaron Cattle, private investor. Please go ahead.

Hi, can you hear me okay? Yep. Thanks for taking the question. So I have one question, one follow-up, and the first is, I would assume that many of your portfolio companies have taken advantage of the payment protection program and other payments programs. Can you hear me now? Yeah, I can hear you. The question is just, do you have a sense of how much of your portfolio has benefited from the PPP or other short-term stimulus plans, and thus, how will they manage through that should those programs roll off, which could be quite imminent in this fall or later this year?

Thank you. That's a good question. We'd say a handful of our companies... did participate in Triple P. Typically, there would be companies that were already in an SBIC or they were already in an SBA program, so they were already kind of part of the SBA world. Based on what we've seen, those funds have certainly been accretive and helpful and enhanced the liquidity. That said, since most of our companies have professional management teams or sponsorship, they're looking through the Triple P. They're looking at the long-term trends and they're doing what they need to do to bolster their liquidity either through cost cuts or managing their working capital or capital expenditure programs, capital expenditure programs, you know, very tightly. So, you know, as I said in the prepared remarks, we're feeling pretty good about the liquidity of the underlying portfolio, Triple P included in some portion of those names. So just to use that as a segue, we haven't yet seen any Fed Main Streets Thank you very much. Thank you.

One could argue that rather than investing in any new deal at maybe 8, 9, 10 percent, you could be investing in your own stock at... Purchase of stock... You're...

You're cutting out, I think you're asking about stock buyback. That's my inference. You're asking about stock buyback. It's something that we look at all the time. We've done two stock buybacks in our history at Penn and Park. One we've completed about a year ago, so we've bought back about $60 million of stock. Over the course of time today, the market cap, that's a relatively large amount of capital relative to the existing market cap of the company. It's something we think about all the time in a world where we are focused right now mostly on liquidity, making sure that we can get through the pandemic. I think we've kind of put that on hold for a while, or at least the next few quarters until we get through the pandemic, and then we'll pick it up again. We just want to make sure we have excess liquidity to deal with. Most importantly, our existing portfolio companies get through the pandemic. And that's why my comments about kind of new originations are somewhat muted. and we just really want to preserve capital at this point, preserve liquidity. Certainly we do want to look at new deals, you know, but we are very focused on getting through the pandemic in as good a fashion as possible. So I don't know if that answered your question. Your question was a little unclear. It looks like you may be on a cell phone, but, you know, Aaron, anything else or did I answer your question?

No, thanks a lot. Sorry for the communication. I am on a cell phone, so appreciate your time. Thanks a lot. Great, thank you.

It appears there are no further questions at this time. Mr. Penn, I'd like to turn the conference back to you for any additional or closing remarks.

I just want to thank everybody for being on the call today. A reminder that the next time we are doing a call is our 10K, so we'll be a couple weeks later than normal, probably mid-November. I look forward to speaking to people then. If anybody wants to chat between now and then, we're happy to talk to you. Thank you very much for your time today.

This concludes today's call. Thank you for your participation. You may now disconnect.