Oaktree Specialty Lending Corp Q4 FY2021 Earnings Call

Welcome, and thank you for joining Oaktree Specialty Lending Corporation's Fourth Fiscal Quarter and Full Year 2021 Conference Call. Today's conference call is being recorded. Now I would like to introduce Michael Mosticchio of Investor Relations, who will host today's conference call. Mr. Mosticchio, you may begin.

Thank you, operator, and welcome to Oaktree Specialty Lending Corporation's Fourth Fiscal Quarter and Full Year 2021 Conference Call. Our earnings release, which we issued this morning, and the accompanying slide presentation can be accessed on the Investors section of our website at oaktreespecialtylending.com. Our speakers today are Armen Panossian, Chief Executive Officer and Chief Investment Officer; Matt Pendo, President and Chief Operating Officer; and Mel Carlisle, Chief Financial Officer and Treasurer. Also joining us on today's call for the question-and-answer session is Chris McKown, the company's current Assistant Treasurer, who will be taking over the CFO and Treasurer positions from Mel next month. Before we begin, I want to remind you that comments on today's call include forward-looking statements reflecting our current views with respect to, among other things, the ability to realize the anticipated benefits of the merger and our future operating results and financial performance. Our actual results could differ materially from those implied or expressed in the forward-looking statements. Please refer to our SEC filings for a discussion of these factors in further detail. We undertake no duty to update or revise any forward-looking statements. I'd also like to remind you that nothing on this call constitutes an offer to sell, or solicitation of an offer to purchase any interest in any Oaktree fund. Investors and others should note that Oaktree Specialty Lending uses the Investors section of its corporate website to announce material information. The company encourages investors, the media and others to review the information that it shares on its website. With that, I would now like to turn the call over to Matt.

Thanks, Mike, and thank you to everyone for joining this call. The fourth quarter completed a strong fiscal year for OCSL. We generated solid financial results and investment performance that was highlighted by robust origination activity and pristine credit quality. We, again, grew NAV and meaningfully increased our dividend. Full year 2021 adjusted net investment income per share was $0.64, up from $0.51 for fiscal 2020, driven by higher adjusted investment income reflecting our larger investment portfolio as well as higher prepayment fees and OID acceleration on some of our investments made in the wake of the pandemic. Importantly, this marked our highest annual level of adjusted net investment income under Oaktree's management, and represents the tremendous progress we have made since taking over management of the company 4 years ago, as well as the realization of synergies from the merger with OCSI, which closed earlier this year. Given the strength and consistency of our earnings, our Board increased our quarterly dividend by 7% to $0.155 per share. This was the sixth consecutive quarterly increase and represented a 41% increase from a year earlier. Our dividend is now up 63% from its pre-COVID level. We reported NAV per share of $7.28, up 1% from the prior quarter, and up 12% for the full year. The quarterly increase reflected the continued price appreciation on certain debt and equity investments, and for the annual increase, successful realizations contributed as well. Importantly, our NAV continued to exceed its pre-COVID high and was up more than 10% from the end of calendar 2019. We had another strong year of originations. During full year 2021, we leveraged Oaktree's credit platform to generate nearly $1.2 billion of new investment commitments. Many of our new originations have been in the form of directly originated investments where we co-invested alongside other Oaktree funds. These new originations, in aggregate, were attractively priced at approximately 8.6%, which exceeded the yield on investments that were exited the year by approximately 2%. This ongoing shift in the portfolio towards higher-yielding proprietary investments has led to improved debt portfolio yield, which increased to 8.7% at year-end from 8.3% 1 year ago. Importantly, this all occurred against the backdrop of LIBOR remaining at all-time lows throughout the fiscal year. Credit quality remains very strong. It's a testament to our disciplined underwriting and risk controlled approach to investing. As with the prior quarter, we had no investments on nonaccrual at the close of the fourth quarter, and noncore investments represented just 5% of their portfolio at fair value at quarter end. And to start fiscal year-end, I also wanted to iterate some of the key improvements we have made to our capital structure since the closing of the merger with OCSI in March. These changes enhance our flexibility and meaningfully lowered our cost of debt capital. In May, we issued $350 million of senior notes at a 2.7% coupon, which we subsequently swapped to a floating rate at LIBOR plus 1.66% to better match the floating rate nature of our underlying investment portfolio. We also amended our syndicated credit facility, increasing the size to $950 million from $800 million and extending maturity by 2 years to May 2026. Additionally, we retired a higher-cost credit facility acquired from OCSI, and we amended the City facility to reduce costs in some of our lower-yielding quoted loans. By taking these steps, we proactively reduced our weighted average interest rate on debt outstanding to 2.4%, down 30 basis points from 2.7% in last year's fourth quarter. We also improved our funding profile by more than doubling our unsecured borrowings outstanding, and boosted our borrowing capacity by more than $300 million. Finally, we received a strong vote of support from our investment advisor, Oaktree, who purchased 2.3% of outstanding shares from our largest shareholder in September. Oaktree, along with our management team and directors, now own 3.1% of OCSL shares, which we believe further strengthens the alignment between us and our advisors. Before turning the call over to Armen, I wanted to remind you that Mel has announced he will step down as CFO and Treasurer of OCSL at the end of November to assume another senior management role within Oaktree. We thank Mel for his financial stewardship over the last 4 years, and of course, wish him well in the new position. Chris McKown, a Managing Director of Oaktree, will become OCSL's CFO and Treasurer, effective upon Mel's resignation. Chris currently serves as OCSL's assistant treasurer, has worked closely with Mel since we took over management of the company in 2017. Chris is very well suited and prepared to step into his new role, and he will do so at a time when we are exceptionally well positioned for fiscal 2022.

Thanks, Matt, and hello, everyone. I'll begin with comments on the market environment and continue with some additional highlights from our fiscal fourth quarter. Markets held up well in the September quarter, supported by economic growth and expectations for continued expansion. This resulted in further spread compression and continued low default rates in the credit markets. However, as we cautioned last quarter, inflation pressures in the economy merit careful examination. U.S. inflation is currently running above 6%, and both food and energy costs are rapidly rising. Natural gas prices, for example, have doubled in 2021, and oil is up more than 50%. Inflation is very difficult to predict, and many market participants believe it will prove short-lived. But the events of the past 1.5 years have been unprecedented in both impact and government reaction. Before 2020, the world had never purposely shut down a significant percentage of its economy and then tried to restart it. No one knows how long it will take for bottlenecks in the supply chain to fully open up and for the labor force to be reconstituted. As such, inflationary pressures may persist. This could force the Fed to increase interest rates faster than investors currently expect. So we believe it's important to view inflation and the current environment carefully and with objectivity. With that in mind, we are focusing on finding good relative value and are investing where we believe the best risk-adjusted returns are. We are utilizing the full scope of Oaktree's scale and resources to uncover and invest across a wide array of industries to a diversified group of issuers. We are leveraging Oaktree's ability to negotiate and structure customized private deals that we believe provide downside risk protection, and we are finding opportunities in less congested areas of the market by lending to nonsponsor-owned businesses. As we've highlighted on past calls, we also continue to identify compelling opportunities among companies in life sciences and technology, sectors that are poised for long-term growth as the global economy becomes increasingly driven by applied sciences and digital commerce. We also continue to evaluate opportunities in the sponsor lending market, partnering with select private equity firms that we think have subject matter expertise in particular industries and sectors. Altogether, we are judiciously deploying capital on favorable terms and in a risk-controlled manner to further grow our portfolio and generate strong returns for our shareholders. Now turning to the overall portfolio. At the end of the fourth quarter, our portfolio was well diversified, with $2.6 billion at fair value across 138 companies. 87% of the portfolio was invested in senior secured loans, including 69% in first lien. Median portfolio company EBITDA as of September 30 was approximately $106 million, reflecting our preference of lending to larger, more diversified businesses, which we believe reduces risk and has contributed to our consistently solid credit quality. Moving on to investment activity. While the market remains competitive, we leverage the Oaktree platform to originate $385 million of new investment commitments across 14 new and 6 existing portfolio companies in the quarter. Of these, 91% were first lien loans and included $304 million in private transactions and $79 million in the new issue primary market. Our investment in RumbleOn is a compelling example of the unique opportunities we are finding in the non-sponsored area of the market. RumbleOn is an omnichannel platform that operates the largest network of powersports dealerships in the U.S., and an e-commerce marketplace that aggregates and distributes preowned powersports and motor vehicles to and from consumers and dealers. Its e-commerce business is the only online marketplace capable of facilitating consumer-to-consumer sales in the power sports sector, and it is rapidly growing its omnichannel offering by expanding its dealership footprint. Oaktree provided a $240 million first lien commitment to support the company's continued growth activities. OCSL was allocated $54 million at an attractively priced LIBOR plus 825 basis points, as well as warrants in the company. With respect to repayments, we received $202 million from paydowns and exits in the fourth quarter. This amount included payoffs and proactive sales of lower-yielding investments, which we were able to selectively reinvest into our higher-yielding originations this quarter. The weighted average yield on our new debt investment commitments for the quarter was 8.6%, which exceeded a 6.4% average yield of investments that we exited. This helped to further increase the yield on our debt portfolio, which grew by 30 basis points to 8.7% at year-end from 8.4% in the prior quarter. Looking ahead, our pipeline remains robust as we are evaluating a range of interesting investment opportunities that we believe present an attractive risk-reward. Our strong balance sheet and liquidity position us well to take advantage of attractive opportunities. Finally, I also want to wish Mel all the best in his new role within Oaktree and congratulate Chris on his promotion to CFO. Chris is a key contributor on a deep and talented team, and we are confident that he will maintain our tradition of providing you with high-quality financial reporting and transparency. Now I will turn the call over to Mel to discuss our financial results in more detail.

Thank you, Armen. I greatly appreciate your kind words. I've been fortunate to have worked with a great team here. Ever since Oaktree took over the management of the company, I strongly believe that OCSL will be in very capable hands with Chris McKown at the helm as CFO. I've known Chris for 10 years, and I'm very confident that he is the right person for the job. Before I turn to our financial results, I'd like to take a moment to remind you of the several non-GAAP measures we put in place to make the company's post-merger financial results easier to understand and more comparable to our results prior to the merger. These non-GAAP measures are intended to remove the impact of the income accretion as well as any net realized and unrealized gains or losses arriving solely from the merger accounting adjustments. More information about these supplemental disclosures can be found in our earnings release and slide presentation. Now turning to our financial results. OCSL delivered another quarter of solid financial performance, which also contributed to exceptionally strong full year results. For the fourth quarter of fiscal year 2021, we reported adjusted net investment income of $29.1 million or $0.15 per share, down modestly from $33.7 million or $0.19 per share in the third quarter. The decline was the result of much lower prepayment fees and OID income in the fourth quarter, primarily driven by $7 million in such fees last quarter in connection with the payoff of our loan to William Morris Endeavor. Partially offsetting this decline was higher interest income as the earnings power of the portfolio has grown as a result of the larger investment portfolio and increased yield. Net expenses for the fourth quarter totaled $28.3 million, down $0.8 million sequentially. The decrease was mainly due to lower incentive fees, offset by higher base management fees and interest expense, driven by an increase in borrowings and our larger investment portfolio. For the fiscal year 2021, we accrued $17.6 million of Part II incentive fees under GAAP based on the very strong portfolio performance we delivered. As a reminder, OCSL bases Part II incentive fees annually, and to the extent that it has realized gains that exceed realized and unrealized losses at fiscal year-end. Based on realized gains, the actual amount of those fees payable for full year 2021 was $8.8 million, according to the calculations under the Investment Advisory Agreement. Turning to credit quality, which continues to be excellent. As Matt mentioned, we had no investments on nonaccrual at quarter end, and all of our portfolio companies made their scheduled interest payments. Now moving to the balance sheet. OCSL's net leverage ratio increased to 0.95x from 0.79x at June 30, reflecting the strong investment originations that we made during the quarter. Net leverage is now near the high end of our target range of 0.85x to 1.0x. At September 30, total debt outstanding was $1.3 billion and had a weighted average interest rate of 2.4%. Unsecured debt represented 51% of total debt at year-end, up from 42% at the beginning of the year following the 2027 note offering. At year-end, we had total liquidity of approximately $500 million, including $29 million of cash and $470 million of undrawn capacity on our credit facility. Unfunded commitments, excluding unfunded commitments to the joint ventures, were $216 million, with approximately $154 million of this amount eligible to be drawn immediately as the remaining amount is subject to certain milestones that must be met by portfolio companies. Now turning to our 2 joint ventures. The Kemper JV had $379 million of assets invested in senior secured loans to 55 companies. This compared to $387 million of total assets invested in 57 companies last quarter. Assets decreased mainly due to portfolio payoffs and sales of lower-yielding investments. The JV generated $2 million of cash interest income for OCSL during the quarter, and we also received a $450,000 dividend. Leverage at the JV was 1.4x at year-end comparable to the June quarter. The Glick JV had $141 million of assets as of September 30. These consisted of senior secured loans to 37 companies. Leverage at the JV was 1.1x at year-end, relatively unchanged from last quarter. OCSL's subordinated note in the Glick joint venture totaling $56 million continues to be current, and we received $1.2 million of principal and interest payments on the notes during the fourth fiscal quarter. In summary, we are very pleased with our financial results for the quarter and full year, and we continue to believe our diverse portfolio and flexible balance sheet positions us well for the future. Now I will turn the call back to Matt.

Thank you, Mel. We finished a very strong year at OCSL, generating a return on adjusted net investment income per share of 10% and adjusted earnings per share of 19%. We also grew NAV by 12% and increased our dividend by 41% over the course of the year, declaring annual dividends of $0.55 per share. Our current $0.155 dividend rate represents an attractive 8.5% yield on book value on an annualized basis. We believe this strong conventional performance is directly correlated to the value that Oaktree brings to OCSL and what differentiates us from our peers. Our ability to grow NAV and dividends since taking over management and over the course of the pandemic has been exceptional. NAV is up over 10% from its pre-pandemic high in December 2019. We also have increased our dividend for 6 consecutive quarters and has grown by 63% from its pre-pandemic run rate. Taken together, OCSL has generated an attractive 12% annualized return on equity since December 31, 2017, including a 20% return over the past year alone. We are proud of this accomplishment as it demonstrates the power of the Oaktree platform, and our ability to deliver superior investment performance, both in periods of market strength and distress. That said, we continue to see opportunities to further increase returns over time. We remain focused on positioning the portfolio for an improved yield by rotating out of lower-yielding investments and into higher-yielding proprietary loans. We made good progress in this fiscal year, exiting $168 million of these types of investments. At year-end, $83 million of senior secured loans priced at or below LIBOR plus 4.5% remained in the portfolio, including approximately $55 million of loans that we acquired in the OCSI merger. Our new investments during the year came in at attractive yields, which means there is more improvement in yield on that portion of the portfolio that we expect to realize over time. Another opportunity for us to increase ROE is to further optimize both of our joint ventures. We can accomplish this by selectively rotating out of lower-yielding investments into higher-yielding ones as well as increasing leverage at the JVs. We have ample capacity at both of these vehicles and will judiciously grow these portfolios, which we believe will also be accretive to ROE over time. In conclusion, we are very pleased with our strong fourth quarter and full year results. We are excited about our future prospects, and are optimistic that we will continue to be able to identify new risk-adjusted investment opportunities and deliver attractive returns to our shareholders. Thank you for joining us on today's call and for your continued interest in OCSL. With that, we're happy to take your questions.

Today's first question comes from Devin Ryan at JMP Securities.

First question here just around portfolio leveraging. So a really nice quarter for capital deployment, a nice step-up in leverage to 0.95x. I know you're kind of at the upper end of the 0.85x to 1 on your target range. Just given the current deal-making environment and how strong credit quality has been in the portfolio, how are you guys thinking about that upper band of 1x and potentially where that could go and what would drive kind of the upper band higher from here?

Thanks, Devin. It's Armen. So we feel pretty comfortable with the range still at 0.85x to 1x. We did have some very strong originations in the quarter. What's hard to predict quarter-to-quarter are the pace of repayments. We still also have a nice amount of lower-yielding, publicly traded paper that we can rotate into higher-yielding origination that we knock on wood have been finding a good amount of. So we don't feel compelled to raise that upper end of the target range. We think we could operate within it and still be able to continue to originate pretty attractive debt for the portfolio.

Okay. Great. And then just a follow-up, it sounds like you got more on the sponsor side. But can you maybe clarify in sponsor versus nonsponsor both in terms of just opportunity set and pricing as well?

Sure. We're actively involved in both sponsor and nonsponsor areas. With sponsors, we focus on large sponsors with extensive expertise in specific industries. We prefer this for two reasons. First, we want to partner with sponsors who have a proven track record of successful execution. Second, many of the sponsors we work with support their ventures with substantial equity investments, considering them platforms for growth. In some cases, we've secured equity checks exceeding 50% along with covenants in those agreements. Our preference is to collaborate with very strong sponsors, and when we encounter suitable deal flow, we are keen to pursue it. However, the market for sponsor deals is quite competitive, particularly with the significant amounts of assets under management raised in the past one and a half to five years, which are targeting similar deals. It's fair to say there's a lot of cash available, but not enough deals, which characterizes the sponsor market. Our strategy is to focus on areas where there is less competition, using our firm's reputation and expertise as a more opportunistic lender with experience across various industries and economic cycles. This enables us to access attractive deal flow that is often less competitive. For instance, I mentioned RumbleOn in my prepared remarks as an example of a well-structured nonsponsor deal that is lightly leveraged and has potential for growth. We are eager to pursue these kinds of opportunities. We see numerous deals in both categories, which drives our interest in broadening our potential deal flow. However, we are currently executing on less than 5% of the deal flow we encounter. Therefore, our primary objective is to maximize our deal sourcing while carefully selecting the best credit opportunities and structuring to mitigate downside risks and take advantage of upside potential when possible.

Our next question comes from Ryan Lynch at KBW.

My first question relates to Slide #6 in your presentation. Out of the $385 million in new commitments, it appears that $345 million was allocated to new portfolio companies. This seems to differ from the trend we've observed in most other BDCs, which tend to focus heavily on existing portfolio companies. You seem to be deviating from that trend in this quarter. Are there any key insights we should keep in mind regarding this situation?

This is Armen, Ryan. I appreciate your question. We're responding to the deals we can source. I want to highlight a couple of points. First, we're collaborating better than ever across the Oaktree platform. This includes our sponsor-oriented lending, which we've been doing for 20 years in our mezzanine fund, and our opportunities fund that has significant available capital and was very active in 2020 and 2021. The deal flow you're observing this quarter consists of several transactions across multiple Oaktree-managed accounts. Importantly, we are not engaging in sponsor deals with tighter spreads and weaker legal documents, which is not our strategy. This could explain why other BDCs are focusing more on their existing portfolio companies, possibly upsizing or refinancing because they have familiarity with those businesses and sponsors. Even if the pricing tightens by 50 basis points, it can seem more comfortable than pursuing new deals with tighter spreads and less favorable legal terms. For us, our origination this quarter includes a significant amount of non-sponsor deal flow. The sponsor deals we do have are not new LBOs, as sometimes better pricing can be found when a sponsor seeks expansion capital rather than original LBO financing. We're continuing our foundational work. While there's nothing specific we've done differently, we remain positive about life sciences. We originated several deals in that area this quarter and collaborated with our opportunities funds on various transactions, including a recovering airport concessionaire. We're focused on ensuring we capture as much deal flow as possible across our platform while also delving deeper into life sciences. Notably, 2020 was a standout year for us in that sector. It appears that 2021, based on the calendar year, will be just as busy for our direct lending operations in life sciences. As we've executed more deals, we've gained further market access and are achieving strong risk-adjusted returns alongside robust legal protections. We are enthusiastic about this area and continue to explore promising opportunities.

Got you. Thanks for the color on your overall thoughts on where you guys are exploring right now. I had a question on the senior loan fund. You guys obviously have two of them, but just the senior loan fund that first one. It looks like it generated cash interest income of about $2 million, and you guys received a $500,000 dividend payment from that. I'm just curious, can you kind of walk through what is the philosophy? It looks like you guys are retaining capital in that vehicle. Will you guys always retain some level of the income within the JVs? Will it remain at this sort of proportional level? Or even if the income doesn't increase that the overall JV is generating within the JV could that distribution rise more proportional for the earnings power at that JV?

Yes, this is Armen again. I don't want to speculate on what distributions may come from the joint ventures. However, I can make a few points based on our history. First, we have strong relationships with our joint venture partners, which we believe enhances the value of OCSL. Historically, when we have retained capital in the joint ventures, it has been primarily to strengthen their capital structures rather than to expose them to risk. With a solid portfolio performance and effective management of the capital structure, as well as the retention of some dividends, our joint ventures are currently in good condition. Each quarter, we will assess and present our recommendations to the board regarding possible distributions from the joint ventures. We are confident about their current positioning. We will continue to evaluate on a quarterly basis whether it is more beneficial to retain capital in order to grow or reduce their debt or to take distributions as dividends for OCSL. That's about all I can say, as I can't provide forward-looking guidance on this matter.

No, understood. One last question, if I may. Regarding the $83 million of lower-yielding loans on your books, are all of those liquid loans that you can manage to rotate out, or do any of them consist of private illiquid assets?

Those are primarily liquid tradable securities in the broadly syndicated market, allowing us to execute sales at any time. While there is typically a few weeks of settlement involved, we have been able to closely manage this as a source of cash.

The next question will come from Bryce Rowe from Hovde Group.

I wanted to maybe follow up on Ryan's questioning there around the JVs. And you guys have talked about optimizing balance sheet leverage at the JVs for a couple of quarters now. And even within the BDC, we saw a nice uptick in net balance sheet leverage here in the third quarter. It looked like the JV balance sheet leverage was roughly the same quarter-over-quarter. So kind of curious how that kind of juxtaposes against what you're seeing within the BDC? Any opportunities to continue to rotate out of some of the lower-yielding investments within the joint ventures. It looks like that was relatively stable quarter-over-quarter as well. So I just wanted to get a little conversation around what's happening within the joint ventures from an investment perspective being able to rotate out and maybe put money to work at higher yields within the JVs?

Yes, it's a good question. We are always looking to optimize the portfolios within the joint ventures for both risk and return. When possible, we are making rotations within the joint ventures. This approach is case-specific and depends on market conditions, especially in the new issue on the syndicated market. Our trading desk at Oaktree is well-equipped, and we have a broadly syndicated loan business and CLO management. We actively engage in the broadly syndicated market on both a secondary and primary basis every day. When feasible, we trade within the joint ventures and the BDC itself to optimize returns while managing risk carefully. Our goal is to maintain manageable risk levels and to seek out inefficient pricing in both privately negotiated transactions and public markets. While I can't provide any programmatic comments on this, I want to emphasize that we are consistently trying to maximize returns within the joint ventures. If there's something more specific you were looking for, please let me know.

No, I think that covers it well. The question revolves around observing a shift away from lower-yielding investments on the BDC balance sheet, noticing those lower-yielding investments decrease within the BDC while remaining stable in the JVs, and I'm curious why we haven't seen some changes in the JVs compared to the BDC. I believe you addressed it.

We're making efforts in this area, and in the joint ventures, the key aspect to consider is the broadly syndicated market, particularly the new issues. From what I've observed, it's likely that about 80% of the new offerings currently available do not meet the return levels that would be suitable for the joint ventures. While there may be strong credits out there, our focus is on optimizing both risk and return rather than prioritizing one over the other. We monitor new deals and secondary market trading closely, but we're not identifying a substantial opportunity to adjust the portfolio in a way that would enhance both risk and return for OCSL.

Good color. Maybe shifting to the right side of the balance sheet now that you're obviously using a bit more of the revolver. Just curious how you're thinking about capital structure? Do you think we'll possibly see some more tapping of unsecured? Or are you pretty comfortable with where the capital structure sits as of September 30?

Sure. It's Matt. Thanks, Bryce. I mean, I think we're pretty comfortable with the right side of the balance sheet between the revolvers and the unsecured notes and the kind of the mix between secured and unsecured and our liability profile in terms of maturities and pricing. So I think, I wouldn't see a lot of changes there. We're pretty comfortable. We've been able to decrease our funding cost. So it seems like it's in pretty good shape. That being said, we continue to look at the markets, and we continue to look at the bank market as well as the unsecured market and it just makes sense we're as optimized as possible, but it's in pretty good shape right now.

Okay. That's good color. And then maybe one kind of ticky tack question for Mel. I saw an uptick in the provision for income taxes here in the press release and maybe I missed it within the commentary, but just curious what's driving the increase in tax provision there?

Thanks, Bryce. This is an opportunity for Chris to join the Q&A. Chris, do you want to take that one?

Yes, sure, happy to. It's really driven by a larger tax distribution from Dominion. So you'll see kind of a corresponding increase in the dividend income quarter-on-quarter. So I think the kind of the way to think about that is to look at the dividend income and then to deduct out that above the line provision for income tax to think about it sort of a net dividend amount.

Ladies and gentlemen, this concludes our Q&A session. I would now like to pass the conference back to management for any final remarks.

Great. Thank you, and thank you all for joining us on today's call. A replay of this call will be available for 30 days on OCSL's website in the Investors section or by dialing (877) 344-7529 for U.S. callers or 1 (412) 317-0088 for non-U.S. callers, with the replay access code 10160823, beginning approximately 1 hour after this broadcast.

And thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.