Sound Point Meridian Capital, Inc.

Please stand by. Your conference is about to begin. Should you require operator assistance today, please press star and 1. Good day, everyone, and welcome to this SoundPoint Meridian Capital, Inc., second quarter 2024 earnings conference call. To get us started today, all participants are in a listen-only mode, but later you will have an opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and 1 on your touch-tone phone. Please note today's session is being recorded, and I'll be standing by should you need any assistance. It is now my pleasure to turn today's program over to Peter Skusa from Investor Relations. Please go ahead.

Good day, ladies and gentlemen. Thank you for standing by. SoundPoint Meridian Capital refers participants on this call to the investor webpage www.soundpointmeridiancap.com for the press release, investor information, and filings with the SEC for discussion of the risks that can affect the business. SoundPoint Meridian Capital specifically refers participants to the presentation furnished today on Form 8K with the Securities and Exchange Commission, and to remind listeners that some of the comments today may contain forward-looking statements, and as such, will be subject to risks and uncertainties which, if they materialize, can materially affect results. Reference is made to this section titled Forward-Looking Statements in the company's earnings press release for the period from IPO on June 13th through June 30th of 2024. which is incorporated herein by reference. We note forward-looking statements, whether written or oral, include, or are not limited to, SoundPoint Meridian Capital's expectation or prediction of financial and business performance and conditions, as well as its competitive and industry outlook. Forward-looking statements are subject to risks, uncertainties, and assumptions which, if they materialize, can materially affect results, and such forward-looking statements do not guarantee performance, and SoundPoint Meridian Capital gives no such assurances. SoundPoint Meridian Capital is under no obligation and expressly disclaims any obligation to update, alter, or otherwise revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. In addition, historical data pertaining to the operating results and other performance indicators applicable to SoundPoint Meridian Capital are not necessarily indicative of results to be achieved in succeeding periods. I will now turn the call over to Ujwal Desai, Chief Executive Officer of SoundPoint Meridian Capital.

Thank you to everyone joining us today for your interest in SoundPoint Meridian Capital, SPMC, and welcome to our first earnings call as a public company. We would like to invite you to download our investor presentation from our website, which provides additional information about the company and our portfolio. With me today is our Chief Financial Officer, Kevin Gerlitz, And after our prepared remarks, we will open it up to your questions. I'm pleased to report that SoundPoint Meridian Capital delivered solid period results, reflecting the strength of our investment strategy, robust IPO balance sheet, and the successful execution of our strategic initiatives. Moreover, subsequent to period end, we further enhanced our balance sheet and liquidity position through a new $100 million net asset value credit facility. Since this is our first call as a public company and some of you may be hearing our story for the first time, I would like to spend a few minutes to highlight our value proposition, our compelling differentiation, and why we're excited about our long-term growth potential. TimePoint Meridian Capital is an externally managed closed-end investment company with the primary investment objective of generating high current income with the secondary objective to generate capital appreciation. We seek to achieve these objectives through investing primarily in third-party collateralized loan obligation, or CLO, equity and mezzanine tranches. Our investments are predominantly U.S. dollar-denominated CLOs that are backed by corporate leverage loans issued primarily to U.S. obligors. Our portfolio as of June 30th is diversified across more than 50 CLO positions and 20-plus CLO managers with the underlying loan portfolio consisting of approximately 1,500 unique loans across 30-plus sectors. We believe this strategy of broad diversification enables us to manage risk effectively and provide dividend sustainability and downside protection through changing market conditions. SoundPoint Meridian Capital is backed by SoundPoint Capital, a credit specialist platform with an experienced investment team and proven track record in the CLO space. Founded in 2008, SoundPoint Capital has grown to be a major player in the credit markets with approximately $45 billion of assets under management. It is one of the largest investors in senior secured corporate loans and ranks among the top five managers of CLOs globally. SoundPoint's structured product business synergizes well with the loan business, while the private credit and commercial real estate credit businesses add breadth to the platform, providing unique insights to the team. Palm Point Capital prides itself on its large and experienced team of investment professionals, including an eight-member structured products team and a strong culture of cross-collaboration. This core group is further supported by over 100 professionals across various departments, including operations, legal, compliance, finance, and investor relations, ensuring comprehensive and well-rounded support as we execute our investment strategies. SoundPoint Meridian predominantly invests in CLO equity. Historically, CLO equity has experienced strong risk-adjusted historical returns, along with high quarterly cash distributions. These cash distributions are driven by the spread between underlying loans and CLO liability, along with CLO structural leverage. We believe SoundPoint Meridian Capital's key advantage in the CLO space lies in our comprehensive understanding of risk, within both the underlying loan portfolios and the CLO structure itself. Furthermore, our backing from SoundPoint Capital's large credit platform provides us with valuable insight into loans and market perspectives. This is further enhanced by Compass, a proprietary set of analytical tools developed by SoundPoint to identify risks and inefficiencies in the CLO market. In addition, our strong relationships with counterparties may often lead to first-look opportunities at New Deal, while our experienced and expert team brings a deep understanding of CLO structures. Together, these qualities and capabilities position us well to effectively manage and capitalize on opportunities within the CLO market. Our investment philosophy centers on active portfolio management, emphasizing capital preservation while pursuing attractive risk-adjusted returns for our shareholders. This approach is founded on four key pillars. Number one, focusing on high-quality investments, dedicating significant time to analyzing the historical performance of managers and portfolios. Number two, employing a data-driven and quantitative approach, enabling us to capture unique insights. Number three, maintaining an active and opportunistic stance in investing, generating alpha through strategic trading as risk evolves. And lastly, shielding our investment portfolio from downside risk ensuring a balanced and resilient investment strategy. With that, I will now turn the call over to Kevin for a more detailed review of our financial highlights for the quarter.

Thanks, Ujjval, and hello, everyone. As Ujjval mentioned, for the period from our IPO on June 13th through June 30th, we delivered net investment income of $1.54 million, or 8 cents per share. For the period from June 13th through June 30th, we recorded net unrealized loss on investments of $2.99 million and a net realized loss of $22,000. Total expenses for the period from June 13th through June 30th were $883,000. Moving to our balance sheet, as of June 30th, 2024, total assets were $406.9 million and total net assets were $398.7 million. and our net asset value per share stood at $19.91. Available liquidity consisting of cash was approximately $66.4 million. The company had no leverage as of June 30th, 2024. Subsequent to quarter end, we entered into a $100 million net asset value revolving credit facility with CIBC. This facility may be increased up to $125 million. For the third quarter, we declared a 30 cent per share dividend, which encompasses the June stub period and July, and a regular 20 cent per share dividend for each of August and September. We increased our monthly income distributions for the fourth quarter to 22 cents per share, payable at the end of October, November, and December. In sum, we believe our strong and prudently managed investment portfolio positions us well to deliver attractive risk-adjusted returns to our shareholders. I will now turn it back to our CEO, Ujabal Desai.

Thanks, Kevin. We are excited about the present opportunities in the CLO market, which continue to grow each year. Fundamentally, we believe that CLOs provide investors with an efficient way to access the senior secured loan asset class and can offer an attractive risk return profile across various credit cycles. Our successful transition to the public markets is a testament to our overall strength the SoundPoint brand, the expertise of our team, and the confidence of our investors. I would like to extend my heartfelt appreciation to our dedicated team, our strategic partners, and our new shareholders for their support. We are excited about the road ahead and look forward to building long-term relationships with you as we grow and evolve as a public company. With that, we thank you for your time and would like to open up the call for Q&A. Operator,

Thank you, Mr decide and to our phone audience today that is star and one at this time, if you would like to ask a question. Pressing star and one will place your line into a queue and I will open your lines, one at a time, you may remove yourself from the queue at any time by pressing star and two. Once again, that is star and one ladies and gentlemen, to ask a question will pause for a moment to give everyone the opportunity to signal. Once more to our phone audience today, that is star and one on your telephone keypad if you would like to ask a question at this time. We presently have no questions from our phone audience. Mr. Desai, I'd like to turn it back to you for any additional or closing remarks, sir.

Okay. Well, thanks to everyone for listening in today, and thank you for your support.

This does conclude today's teleconference and we do thank you all for your participation. You may now disconnect your lines.