Sabrina Rusnak-Carlson - General Counsel Sam Tillinghast - Co-CEO Chris Flynn - Co-CEO Terry Olson - COO & CFO.

Kyle Joseph - Jefferies LLC Ryan Lynch - KBW Leslie Vandegrift - Raymond James & Associates Casey Alexander - Compass Point Research Christopher Testa - National Securities Corporation Fin O'Shea - Wells Fargo Securities.

Welcome to THL Credit's Earnings Conference Call for its Fourth Fiscal Quarter 2016 Results. It is my pleasure now to turn the program over to Sabrina Rusnak-Carlson, General Counsel of THL Credit. You may begin..

Thank you, Operator. Good morning and thank you for joining us. With me today are Sam Tillinghast, Chris Flynn, our co-Chief Executive Officers and Terry Olson, our Chief Operating Officer and Chief Financial Officer.

Before we begin please note that the statements made on this call may constitute forward-looking statements within the meaning of the Securities Act of 1933 as amended.

Such statements reflect various assumptions by THL Credit concerning anticipated results that are not guarantees of future performance and are subject to known and unknown uncertainties and other factors that could cause actual results to differ materially from such statements.

The uncertainties and other factors are in some ways beyond management's control including the factors described from time to time in our filings with the Securities and Exchange Commission.

Although we believe that the assumptions on which any forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and as a result the forward-looking statements based on those assumptions also could be incorrect. You cannot place -- you should not place undue reliance on those forward-looking statements.

THL Credit undertakes no duty to update any forward-looking statements made herein. All forward-looking statements speak only as of the date of this call. Our earnings announcement and 10-K were released yesterday afternoon, copies of which can be found on our website along with the Q4 investor presentation that we may refer to during this call.

A webcast replay of this call will be available until March 17, 2017 starting approximately two hours after we conclude this morning. To access the replay please visit our website at www.THLcreditBDC.com. With that I will turn the call over to Sam..

Thank you, Sabrina. Good morning everyone. I will begin today's call with some financial and portfolio highlights for the fourth quarter and we will also touch on the progress made executing our strategy in 2016.

Chris will discuss our Q4 investment activity and provide more details on the portfolio and Terry will talk on our financial results including one-time items that impacted this quarter's earnings. Our net investment income per share for the quarter was $0.28 relative to our dividend paid of $0.27 per share.

We're pleased to announce that on March 7 our Board of Directors approved a quarterly dividend of $0.27 per share for the first fiscal quarter of 2017 which is payable on March 31. During the quarter we invested $37.9 million in three new portfolio companies and four existing portfolio companies with a weighted average yield of 9.4%.

We also realized $40.3 million of proceeds, primarily from the sale or full repayment of three loans resulting in a small net portfolio contraction of $2.4 million. As of December 31 we had 47 portfolio investments valued at $669.2 million. The weighted average yield on the portfolio was 11.2% including the Logan joint venture.

During the last year we made significant progress on the repositioning of our portfolio consistent with the strategy we have outlined on previous calls. 90% of our investments for the year were in first lien loans and the Logan joint venture which is a predominantly first lien focused vehicle.

And all of our new loans made during the year were to private equity sponsored companies. We reduced second liens and subordinated debt as a portion of a portfolio from 31% at the end of 2015 to 18% of the portfolio at the end of 2016.

In January of this year we also sold our remaining two CLO equity investments, Flagship VII and Flagship VIII, receiving proceeds in line with our fair value mark at December 31. With those sales BDC no longer has exposure to CLO equity.

For the year ended December 31, we purchased $4 million of our stock of which $2.5 million was repurchased in the fourth quarter. Since we began repurchasing under the program in May 2015 we have bought back a total of approximately 1 million shares for $11.3 million.

Given that our stock repurchase program expired this month our Board of Directors authorized a new $20 million share repurchase program on March 7. Before I turn the call over to Chris I'd like to highlight a few recent organizational changes and additions to our team.

Jim Fellows, the co-head of our Tradable Credit strategy and a member of both the Tradable Credit and Direct Lending Investment Committees, was appointed Chief Investment Officer of THL Credit Advisors.

And Monty Cook, a managing director in our New York office and Howard Wu, a managing director in our Los Angeles office, were both promoted to co-heads of the Direct Lending strategy of THL Credit Advisors which is our management Company and the investment advisor to THL Credit, Inc., the BDC.

We also added a few very experienced professionals to the Direct Lending team. Michelle Handy joined us as a managing director in our Boston office where she is responsible for portfolio monitoring of all Direct Lending investments. Michelle was formerly the chief operating officer of GE Capital's WorkOut group.

Eric Lee who was previously with Credit Suisse joined our Direct Lending investment team in the New York office and will be a director working on sourcing, underwriting and closing transactions. And Will Karim joined our growing legal team as Senior Counsel and Director. Will was formerly with Mayer Brown and Proskauer Rose.

And, finally, earlier this week we announced that Kevin Burke, a former senior managing director at Antares, has joined THL Credit as a senior advisor where he will work closely with our management team advising on investments, capital markets and strategic matters. And with that I will turn the call over to Chris..

Thanks, Sam and good morning everyone. I will begin by providing some detail on our investment activity in Q4. First, we invested $13.7 million in a first lien term loan in Home Partners of America, an acquirer, lessor and manager of single-family homes through its lease with the right to purchase program.

THL Credit partnered with other senior lenders to provide financing to support the Company's growth. We also made a $10 million first lien loan in HealthDrive Corporation to support the refinance of the company by the sponsor Riverside Partners, a longtime partner of THL Credit.

HealthDrive is a provider of mobile specialty services to long term care facilities. Finally, we provided a $9.1 million second lien secured term loan to Miami Beach Medical Group to support a sponsor backed leveraged buyout of the company by Gauge Partners. Miami Beach is a physician practice management company.

We also experienced three full realizations in Q4 including our subordinated debt investment in Dr. Fresh, a second lien investment in Synarc and the first lien investment in American Achievement.

As of December 31 our portfolio consisted of $669 million which composed primarily of secured loans with 69% of the portfolio invested in first and second lien loans, 78% when you factor in the Logan joint venture which is mostly composed of first lien loans.

The remainder of the portfolio consists of the following, 4% in subordinated investments, 7% in income-producing securities and 11% in equity and other investments, all based on fair value. Our portfolio repositioning efforts have resulted in a predominantly floating-rate portfolio.

89% of the debt portfolio was invested in floating-rate loans mostly with LIBOR floors, up from 78% at December 31, 2015 which we believe leaves our portfolio well-positioned to benefit from the rising interest rate environment.

As we laid out in our 10-K, 100 basis point increase in LIBOR will result in $3.1 million or $0.09 a share to net income based on shares outstanding at 12/31. This excludes the impact of incentive fees.

With respect to credit quality as of December 31, 97% of our portfolio Company on a fair value basis was rated 1, 2 or 3 credit score which means they are performing loans and we do not have a concern at this time with the collection of principal and interest.

Tri Starr, Loadmaster and WIS were all rated 5 credit scores, meaning that original principal and interest are not expected to be fully collected and represent the remaining 3% of the portfolio.

As of December 31 we had certain loans in these same three portfolio companies, Tri Starr, Loadmaster and WIS, on non-accrual status, representing 2.1% of the portfolio on a cost basis. Our secured loan and capital will return to accrual status in Q4 upon restructuring of the business.

Overall we continue to be pleased with the overall credit quality of the portfolio. Before turning the call over to Terry, I would like to provide an update on our investment in the Logan joint venture which continues to provide accretive earnings strength to our shareholders.

As of December 31, THL Credit had invested $59 million in the Logan joint venture which consisted of 91 companies totaling $203 million at par. We recognized a $2.1 million dividend and income in the fourth quarter, representing a 14.1% dividend yield for the year.

For this year ended December 31 we realized $7.4 million of total income, representing a 13.3% dividend yield. The dividend yield may fluctuate as the result of timing of additional capital invested, change in asset yields and underlying portfolio performance of the Logan investments. With that I will turn the call over to Terry..

Thanks, Chris and good morning everyone. I will be providing a little more color on our financial performance during the quarter. As Sam mentioned our net investment income per share for the quarter was $0.28.

If you exclude the one-time charge related to the accelerated amortization of deferred financing costs associated with the paydown of our term loan, it was $0.29 per share.

We generated $20 in investment income this quarter, down 7% quarter over quarter, primarily due to lower interest income from the timing of repayments and new investments as well as the impact of WIS being placed on non-accrual in Q4. In connection with that we reversed $288,000 of income related to this that had been accrued in Q3.

This decrease in interest income was partially offset by higher dividend income of $3.4 million which included $2.2 million from the Logan JV and approximately $1.1 million from C&K Markets. This compared to $2.8 million of dividend income in Q3.

We also generated $1.5 million of interest income on our income-producing securities including interest on our investment in the Duff & Phelps tax receivable agreement and our two remaining CLO positions which Sam mentioned were subsequently sold.

Finally, we had $350,000 from fee income related to our managed funds and generated about $500,000 from other fee income from several of our portfolio companies during the quarter.

For the year ended 2016, we generated $84.6 million of investment income compared to $94.2 million for the prior year, a decrease of 10% primarily related to the contraction of the portfolio and an increase in non-income-producing investments as a result of certain loans being restructured into equity or placed on non-accrual.

We incurred $10.9 million of expenses during the fourth quarter compared to $11.1 million in Q3. Fees and expenses related to our borrowing were $4.6 million, an increase from Q3 largely as a result of the $366,000 of accelerated financing costs I mentioned earlier.

We also incurred $2.6 million of base management fees and $1.8 million in incentive fees. Incentive fees were lower during the quarter due to a reversal of a deferred component related to historical PIK income from Tri Starr of about $382,000.

Given that Tri Starr is a 5 rated investment and we expect impairment to our principal we have reduced the related incentive fee accounted for as deferred. As a reminder, this shareholder-friendly aspect of our fee structure prevents our manager from receiving any incentive fee related to PIK income until such amounts are received in cash.

Our administrator and professional other G&A and tax expenses totaled 1.9 million in Q4. For the year we incurred $39.9 million of expenses compared with $46.6 million of expenses in the prior year.

The decrease was primarily related to lower incentive fees as a result of realized and unrealized losses in the portfolio and lower management fees from a result of portfolio contraction. During the quarter we recognized unrealized depreciation of about $940,000.

This was driven largely by some downward valuation adjustments related to WIS, Loadmaster and our equity investments in YP and C&K offset by other increases across the portfolio.

Moving on to some balance sheet highlights, our net asset value per share declined slightly from $11.84 to $11.82 due to the net fair value adjustments I mentioned above offset by accretive share repurchases and a change in our tax provision related to unrealized depreciation of an investment held in a blocker corp.

As of 12/31 our leverage was 0.75 times equity which was within our targeted range of 0.6 to 0.8 and in November we completed the issuance of an additional $25 million of unsecured notes or baby bonds due in 2022. And these notes pay interest at a fixed rate of 6.75%.

The proceeds were used to repay our senior term loan and continue to diversify our financing sources. These baby bonds further enhance our flexibility to grow Logan in the future. With that I will turn the call over to the operator for questions..

[Operator Instructions]. Our first question comes from the line of Kyle Joseph from Jefferies. Your question please..

Good morning, guys and thanks for taking my questions. Just given where we're in the first quarter I was hoping to get an outlook on what has changed? Obviously since 9/30 there has been a lot that has changed in our country politically and whatnot.

But if you could just give us a sense of revenue and EBITDA growth trends and any outlook changes from your companies or any appetite, whether their appetite for growth has changed as a result of the election and subsequent administration change?.

Hey, Kyle, it's Sam. It's a good question, it's a topic that there is a lot of discussion about, obviously, with the private equity relationships that we have. I'd say that we haven't seen any numbers change as a result, haven't seen anything change in financial statements or anything like that.

It seemed like end of last year, really right after the election, there was quite a bit of enthusiasm, I think, for a more business-friendly administration, if you will.

I think in more recent weeks the conversations have changed a bit in that there's a fair amount of uncertainty about changes to tax laws, changes to the Affordable Care Act, issues like that. And I think folks are maybe pausing somewhat in some activity. And that's probably more related on the new deal front.

I don't think any of the portfolio companies are necessarily slowing down, although folks are certainly looking at the potential impacts of some of these changes..

Thanks. And then on the new deal front, obviously, we could see the yields on the deals you guys did in the fourth quarter.

But talking more about the competitive environment, are you seeing any other changes in terms of terms on new loans whether it's leverage, covenant levels and just what you are seeing out there from the competitive trends?.

Hey, Kyle, this is Chris. Yes, the market continues to be competitive, obviously. Again, just as a reminder of how we segment the middle market, it's a broad definition across the industry. We're really focused on that $10 million to $25 million, $10 million to $30 million in EBITDA.

While that's competitive, we don't find it as competitive as maybe the broader market, $50 million and above. From a leverage perspective I think it's stabilized. Unfortunately, it's probably stabilized at a high number. But we don't see that increasing over and above from where it has been in previous quarters.

I think if you look at the yield in the portfolio, not necessarily a commentary on the market in general but more of what we said we were going to do as we reposition the portfolio in more first lien loans and offset that lower yielding program with continued investments in the Logan joint venture..

That's a good transition to my next question actually. I wanted to talk about Logan.

Just given how successful it has been, can you give us, can you remind us how big it can be? Is the limit really the 30% bucket? And other than that would you look to potentially start an additional joint venture? And then one other question on Logan would be so I know THL's equity position in it was up in the fourth quarter, but the overall capitalization went down.

Can you just give us a little sense of the dynamics there?.

Yes, to address your last question there was certainly quite a few prepayments that have been occurring in the last, I would say, several months that contributed to a little fluctuation in the size. As we think about the size of it our investment overall relative to the BDC, it's hard to predict, Kyle and I'm not being evasive, it's a great question.

I think we will continue to grow it. As you know, we don't get coverage for it in our borrowing base. So we're using our equity, if you will, to continue to fund it. And we will do it -- the real growth of it will come from the growth of the overall THL Credit platform which at this point will be limited given our ability to raise capital.

But we will certainly look to opportunistically continue to put equity in. As you've seen, we did a little bit more in January and I expect you will see that trend continue through the year, but I don't want a project on exactly how big it would be because there's a lot of dynamics that could impact it..

But, Kyle, just to be specific, as the program is structured we wouldn't, we don't need to go find a second JV partner to grow. We have got sufficient structural flexibility between our own balance sheet and our partner's balance sheet to expand under the existing program.

It's literally just a function of transitioning assets that are primarily our equity positions into the Logan program..

Our next question comes from the line of Ryan Lynch from KBW. Your question please..

First question, you guys had a pretty big drop in interest income. It looked like it dropped about $2.2 million from the third to the fourth quarter. Meanwhile, it looked like your guy's debt investments only dropped a little bit as well as the portfolio yield only decreased a little bit quarter over quarter.

So I know you mentioned, I believe you said that was a $288,000 income reversed in the fourth quarter related to WIS.

I'm just wondering was there anything else one-time that lowered the fourth quarter interest income number, maybe the timing of the fourth quarter deployment or repayments or is the fourth quarter number of interest income a pretty good run rate going forward?.

The fourth quarter, Ryan, a couple of things. One, I think two of the prepayments came I think a week or two after the quarter ended, so that contributed to some of it.

And I think the third quarter had a good amount of prepayment income and accelerated amortization related to repayments in Q4 that had more to pick up, if you will, of unamortized cost as well as prepayment penalty. So you have got the dynamic of three things.

One, to your point on WIS which between the income that wasn't accrued in Q4 and the income that was reversed in Q3, that's about a $560,000-ish prepayment penalties and amortization of the prior quarter was a good slug. And I don't have the number off the top of my head but we can certainly get it for you.

Then if you look at thirdly the impact of Synarc and American Achievement paying off early. Those are the contributors to it as we look at it quarter to quarter..

Okay and then you have, obviously, made a lot of new hires in the fourth quarter. When I look at just specifically the BDC's balance sheet, it looks like you guys are pretty tight on capital, so there is not -- you guys have a limited amount of capital to deploy, at least in the BDC going forward.

So how are you guys able to keep your deal team active and stay active with sponsors and deal flow in the market with limited capital in the BDC?.

Ryan, this is Sam. So THL Credit Advisors manages $8.5 billion both in Direct Lending and Tradable Credit strategies. So on the Direct Lending side we not only have the BDC but we have private credit funds that we manage as well and we're, in fact, ramping up a current fund that we manage.

The BDC and the private credit fund can both, we have exemptive relief so that both entities are able to invest in the same transactions..

And Ryan, I would add to that, too, that the portfolio is turning over and above about $150 million a year within the BDC. So you couple that with what Sam added, there is an adequate capital to keep the engine running, if you will..

Okay. And then as you guys have talked about in the past, shifting strategies, moving out of sub debt and also moving out of some nonsponsored investments, if I look at your portfolio today about 4% in your portfolio still in sub debt and about 16% in nonsponsored.

In addition, with all the restructuring that you guys have had of some legacy strategy investments, would you say as we sit here today that your guy's rotation out of some of those maybe riskier asset classes is largely complete? Or you guys still anticipate moving those buckets down a little bit further?.

I would say on the nonsponsored transactions I think we've got maybe eight credits in the portfolio, about half of which have been restructured. And I think it's four companies that we own the controlling interest, one more that we sort of have a shared equity interest in with another former lender. The other few are performing just fine.

We certainly are not doing any new unsponsored transactions. The companies that we now control, our intention is to build them up, to further develop them, increase revenues, increase cash flow and eventually exit those transactions..

The difficulty, Ryan, obviously as you can appreciate and control equity positions is the time it takes to do that and predicting when it exactly will happen to afford us that cash flow that can be redeployed. But I think Chris has used the phrase we're turning a battleship here.

This takes time and we're going to be patient with the shareholders' capital to optimize the return..

Sure, completely understand, it's a slow-moving process. Just one last one if I can, it looks like a portion which is a smaller portion, but a portion of your guy's investment in Loadmaster Derrick was placed on non-accrual. Now that investment was just very recently restructured.

So can you just talk about what's going on there with the restructuring and the new capital structure that this investment would have been at least stable but it looks like it's already having some issues appendages? So can you just maybe talk about what's going on there?.

As we don't like to get into a tremendous amount of detail, Ryan, on our portfolio companies. But the short answer is one of our three energy credits that continues to feel the headwinds of a slow recovery in the market.

And while we have taken steps to rightsize the business and move it forward there continue to be some headwinds that we're working through and we will continue to do so..

Our next question comes from the line of Leslie Vandegrift from Raymond James. Your question please..

As a quick follow-on to the last question on Loadmaster, if we were having a bit of headwind still on the recovery from the energy markets, etc., crude dropped back under $50 this past week, then what is the opportunities you saw in the early part of this year with the new energy utility investments you went into?.

Leslie, it's Sam again. We probably will not be doing any energy investments going forward. We haven't done any in, I think, three years now, so it's really not an area that we've focused on. So our focus within the BDC is consumer healthcare companies, business and financial services companies and media and information services companies.

Those are the areas that we focus on..

So it was on the utility side rather than the energy side. The description had both in the press release..

Yes, it was a small follow-on investment..

Okay, all right. And then on the interest expense for the quarter, I know you did the new baby bonds to retire the old debt in December and so $25 million of new borrowings there but expenses went up quite a bit for interest expense in the quarter.

So can you walk me through that?.

The largest contributor to that is we had in connection with paying off the term loan we had some deferred financing costs related to its initial we put it in place and that resulted in about $366,000 of incremental amortization of deferred financing costs which was the largest contributor to it..

Okay.

So a run rate of that without the $366,000 is probably what you are going for?.

That's right..

All right. And then on the recurring dividend income from C&K, I know this isn't the first quarter you've done it but just wanted to get a level there.

You said $2.2 million from Logan and, obviously, that can grow depending on the JV, but what is the recurring level you have got coming up from C&K?.

On C&K again along with another partner we control the equity of the business, the decision is made by the Board every quarter as to the level and extent. So I don't want to comment specifically on what it will be going forward. But the expectation is we will continue to pay it so long as we continue to hold our equity position.

I would expect it to be anywhere from where we have paid in the past to some average of what's been more recent. So I think it's in that kind of $800,000 to $1 million range..

Okay, all right.

Then last question, on the healthcare, obviously, this week they had a new plan come out that is going to go before Congress but as well is just general sentiment around the industry for regulation and law changes, have you seen some particular opportunities there on the services side, on the equipment side? What is that market looking like right now?.

Yes, we saw a lot of activity last year in healthcare. But this year with, like you mentioned, the uncertainty of exactly what's going to happen we've actually seen sponsors pull back somewhat. So we're not seeing as much activity on the healthcare side. In terms of our portfolio we have four healthcare transactions to about 7.5% of the portfolio.

We don't expect three of them to have any effect whatsoever if the Affordable Care Act is repealed. One has about 20% exposure to Medicare which may be pulled back, the federal funding for which may be pulled back, but that won't take place until 2020 so we really don't expect much impact from that..

Our next question comes from the line of Casey Alexander from Compass Point Research. Your question please..

Some of these have been answered maybe in a little bit of a different way, but are you at your comfortable target leverage ratio at the moment?.

Casey, this is Terry. Yes, I will tell you we're anywhere from 0.7 to 0.8 as a comfortable range for us. I think we'd broadly say 0.6 to 0.8. But could we go up a little bit? Sure. But our expectation is to drift around the area we're at, maybe a little north..

Okay.

Do you know what the average yield of the realizations, the investments that were realized during the quarter were?.

The yield is about 11%..

Okay. And do you think, the yield, the average yield of your originations for the quarter was in the mid-9s.

Is that a representative level for what you see going forward for new originations?.

This is Chris, Casey. Yes, plus or minus in that range for first lien paper. But just so you -- sift through and build out the portfolio our goal, build a more first lien heavy balance sheet in that 9% to 10% range and then supplement that with a higher-yielding Logan JV as we transition out of some of our equity positions..

And I totally get that and I understand that you want to move up in the capital stack and that's going to cost you some yield.

But going in at 9.5% and coming out at 11% and change, how comfortable are you that you are at the right distribution rate that is sustainable given that trends from the traditional lending side of the portfolio?.

Casey, this is Terry. I think as we reset the dividend last quarter we were mindful of the direction we were headed with the portfolio and the expected growth of Logan over time and the expectation that we would cycle out of the equity over time, as well.

So we think as those higher-yielding positions pay over time and we move forward with the other aspects of it we're comfortable that the $0.27, that was all factored into our decision to set the dividend at that $0.27 level..

Okay, good.

Just to get a sense, just remind me because I don't remember off the top of my head, what is sort of the max size for the Logan JV?.

I think it's $250 million of commitments. But, again, at the BDC size that is not something we can pull down..

Our next question comes from the line of Christopher Testa from National Securities Corporation. Your question please..

You had a decent amount of volume of new additions in the quarter.

Just curious if you could provide us some additional detail on the uses of capital and leverage levels on those deals?.

You are referencing the transactions that we spoke to during the earnings call?.

Yes..

One was just a refi of an existing leverage buyout. That was the Riverside Partners transaction, HealthDrive. And the other two were Medical Beach was a new LBO and Home Partners of America would classify that, that was an existing portfolio company with incremental growth capital..

Chris, this is Terry. Just in terms of the leverage we generally don't get into discussing specific portfolio company leverage just given the confidentiality. But I would characterize these as leverage at or below our current average..

Just with the sponsor deal that you are seeing quarter to date so far here, just wondering how the terms and structures change from what you've seen in the fourth quarter, if at all? Have sponsors, are they still pushing the envelope on leverage, has that backed up a bit? Just curious what you are seeing..

We haven't seen much of a change quarter to quarter. The market continues to be aggressive. Again at that lower end of the middle market one of the things that we like, the financial engineering aspect of the leverage buyout for a $10 million EBITDA business isn't the same as it is for a $100 million EBITDA business.

So if we can provide that certainty of closing flexibility to give them the ability to execute then they start pushing on price and leverage. So it's a component but not near as much. Those sponsors are driving their return in a multitude of ways and not necessarily pushing us for every last dollar. So still continues to be competitive.

I'm not suggesting that it's not, but there's not been a stair shift from Q4 to Q1..

And with the Logan JV, obviously, you are able to put more leverage on lower yielding debt.

Just curious if spreads have come in so much that now there is any sort of reduction in the opportunity set for loans that can go into the JV?.

I wouldn't say there's a reduction in the opportunity set. But you are right, the average yield it's a straight return on asset is under some pressure. We will be taking steps to mitigate that as we look through different ways of our own financing that we have in that portfolio going forward, as well..

And with the CLO equity now off the books, were those sold or were those just repaid?.

We sold them..

Okay.

Can you give us any guidance on what we should expect for a realized gain from those?.

I would say that it's hard to characterize a realized gain, if you will, on the sale of a CLO equity. But I will say these were high single-digit IRRs. And if you look across our portfolio of six CLO investments we have done since time on an aggregate basis, the IRR was just south of 13%, they were sold at the marks..

Our next question comes from the line of Jonathan Bock from Wells Fargo Securities. Your question please..

Fin O'Shea for Jonathan this morning. Thanks for taking our question. First one I had on the C&K equity position, I think you mentioned that it would be running at a fairly stable dividend rate but the income-producing part of that was marked down quite a bit.

Can you walk us through the nature of that markdown and how you feel there?.

Sure. C&K overall is performing well. I think just as we do in all of our credits each quarter, as we do a fundamental analysis that takes into several factors. And the short answer with C&K is as the industry comps were driving multiples lower.

So the adjustment was largely driven to some pressure on relative comps, but I would say that the mark isn't tied to the level of dividend we would expect going forward..

Very well. Another name, CRS, it looks like you invested a little more and the interest rate was taken down, if I'm correct, to an 8% fixed-rate and that also took a mark.

Can you give us an update on that name?.

I don't think there's much of an update to give on that name. There hasn't been a lot of activity. The mark is probably more of a market-related adjustment..

So the interest rate was just amended?.

That's right..

Correct..

Okay, very well. And just one more on Washington inventory. We've heard on that name on some competitors in the space.

Is that with your mark in the non-accrual should we look to a near term restructuring there?.

We can't comment on the specifics of what's going on at moments in time, Fin. But as always our marks that we put in place each quarter consider all the dynamics including Company performance, other dynamics and its mark and the fact that it's on non-accrual we think is reflective of the risk profile. So I'd probably leave it at that at this point..

[Operator Instructions]. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Sam Tillinghast for any closing comments..

All right, thanks everybody. We appreciate your questions and we will talk to next quarter..

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day..