In This Article:
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Net Investment Income: $0.45 per share, a 1% increase over the prior quarter.
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Net Asset Value (NAV) per Share: Increased by $0.01 to $18.20 as of June 30, 2024.
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Portfolio Originations: $356 million with net portfolio growth of $62 million.
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Debt Outstanding: Approximately $1.2 billion with a net debt-to-equity ratio of 1.16x.
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Gross Investment Income: $59 million for the three months ended June 30, 2024.
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Net Expenses: $34.7 million for the three months ended June 30, 2024.
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Net Realized and Unrealized Loss: $1.1 million for the second quarter.
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Quarterly Distribution: $0.41 per share declared for Q3 2024.
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Weighted Average Asset-Level Yield: 11.7% at quarter end.
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Nonaccrual Investments: 0.6% on a cost basis and 0.4% on a fair value basis.
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Available Capital: Over $750 million available for deployment.
Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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SLR Investment Corp (NASDAQ:SLRC) reported a net investment income of $0.45 per share in Q2 2024, marking a 1% increase over the previous quarter.
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The company's net asset value (NAV) per share increased to $18.20, reflecting stability and resilience in its portfolio.
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SLRC's portfolio is predominantly composed of first lien senior secured loans, accounting for approximately 98% of the investment portfolio.
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The company has a low rate of non-accruals, with only 0.6% and 0.4% of the investment portfolio on a cost and fair value basis, respectively.
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SLRC has over $750 million of available capital to deploy, positioning it well to take advantage of economic conditions.
Negative Points
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The private credit market is facing increased competition from the syndicated loan market, affecting pricing and terms.
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SLRC experienced a net realized and unrealized loss of $1.1 million in Q2 2024, compared to a gain in the previous quarter.
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The sponsor finance market remains muted with lower M&A activity, impacting deal flow.
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The weighted average asset-level yield in the asset-based lending portfolio decreased from 15.7% to 15.2% quarter-over-quarter.
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SLRC's net increase in net assets resulting from operations decreased from $27.9 million in Q1 2024 to $23.2 million in Q2 2024.
Q & A Highlights
Q: With a significant portion of the SLRC portfolio being fixed rate, how do you see incremental upside to net investment income (NII) or protecting the dividend coverage level, especially as you move into 2025 and beyond? A: Bruce Spohler, Co-CEO, explained that only 24% of the portfolio is invested in cash flow assets, which are sensitive to base rate changes. The rest is in specialty finance verticals, which are less interest rate-sensitive. The company has room to grow across the portfolio, and they feel confident about the stability of their earnings.