Robert Hamwee – Chief Executive Officer David Cordova – Chief Financial Officer & Treasurer.

Greg Nelson – Wells Fargo Securities Chris Kotowski – Oppenheimer Troy Ward – KBW.

Good morning, and welcome to the New Mountain Finance Corporation Second Quarter 2014 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation there will be an opportunity to ask questions. (Operator Instructions) Please also note this event is being recorded.

I would now like to turn the conference over to Rob Hamwee, the Chief Executive Officer. Please go ahead..

Thank you and good morning everyone and welcome to New Mountain Finance Corporation’s Second Quarter Earnings call for 2014. I am here today with Dave Cordova, CFO of NMFC. Our Chairman Steve Klinsky is unable to join the call today but will re-join us future calls.

I would like to ask Dave to begin and make some important statements regarding today's call..

Thank you, Rob. I would like to advice everyone that today's call and webcast are being recorded. Please note that they are the property of New Mountain Finance Corporation and that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our earnings press release.

I would also like to call your attention to the customary Safe Harbor disclosure in our August 7, 2013, press release and on page two of the slide presentation regarding forward-looking statements.

Today's conference call and webcast may 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 those statements and projections.

We do not undertake to update our forward-looking statements or projections unless required by law. Any references to New Mountain Capital or New Mountain are referring to New Mountain Capital, LLC or its affiliates and may be referring to our investment advisor, New Mountain Finance Advisors BDC, L.L.C. where appropriate.

To obtain copies of our latest SEC filings and to access the slide presentation that we will be referencing throughout this call, please visit our website at www.newmountainfinance.com or call us at 212-720-0300.

At this time, I would like to turn the call back over to Rob Hamwee who will give some highlights beginning on page four of the slide presentation.

Rob?.

Thanks. David and I’ll go through the details in a moment, but let me start by presenting the highlights of another strong quarter for New Mountain Finance. New Mountain Finance’s pro forma adjusted net investment income for the quarter ended June 30 2014 was $0.36 per share above our guidance of $0.33 to $0.35 per share.

This once again, more than covers our Q2 dividend of $0.34 per share. The company's book value on June 30th was $14.65 per share, which is up $0.12 from last quarter and represents another new high for the company. We're also able to announce our regular dividend for the current quarter ending September 30, 2014.

The regular dividend will again be $0.34 per share, consistent with our previously communicated view that we have reached a fully ramped steady state dividend level. In addition, I am pleased to announce that we will be pay a $0.12 special dividend this quarter based on the gain from the sale of our equity position in Learning Care.

The credit quality of the company's loan portfolio continues to be strong with once again no new loans placed on non-accrual this quarter. We have had only one issuer default since October 2008 when the debt effort began representing less than 0.3% of cumulative investments made to-date.

The company invested $158 million in gross originations in Q2, and $136 million net repayments. In addition to the strong quarterly results in the core business, we executed on a number of important strategic initiatives that will create meaningful shareholder value in the coming quarters.

We completed two new financings totaling $165 million established our first senior loan program that will generate management fees for the BDC and received the approval from the SBA for our first SBIC license. In summary, this has been a very strong quarter for NMFC and we are pleased with our continued success.

Before diving into the details of the quarter, as always I would like to give everyone a brief review of NMFC and our strategy. On Page 5 we provided some key financial highlights.

As outlined on Pages 6 and 7 of our presentation, NMFC is externally managed by New Mountain Capital, a leading private equity firm, with more than $12 billion of assets under management, and approximately 100 staff members, including over 60 investment professionals.

Since the inception of our debt investment program in 2008, we have taken the New Mountain’s approach to private equity and applied it to corporate credit with a consistent focus on the growth business models and extensive fundamental research within industries that are already well known to New Mountain or more simply put, we invest in recession-resistant businesses that we really know and that we really like.

We believe this approach results in a differentiated and sustainable model that allows us to generate attractive risk-adjusted rates of return across changing cycles and market conditions. To achieve our mandate, we utilize the existing New Mountain investment team as our primary underwriting resource.

Additionally, I would note here that our public float is now over $759 million, up from $150 million with our IPO. Turning to Page 8, you can see our total return performance from our IPO in May 2011 through August 4, 2014.

In the three plus years, since our IPO, we have generated a compounded annual return to our investors of 13.6% significantly above our regular dividend yields. Page 9 breaks up the four components of this return.

As you can see, the excess return is roughly evenly spread between special dividends, increase in book value and trading multiple expansions. As outlined on Page 10, while credit spreads have broadly trended down since our last call driven largely by record CLO issuance the last few weeks we’ve seen a modest market sell up.

This recent volatility is a function of a number of factors including large outflows from high yield bonds and uncertainty now that means of high demand of fed driven rates increases. We continue to see significantly elevated credit spreads in smaller less liquid credits.

Given the continued focus in the market and the possibility of future short-term and long-term rate increases, we wanted to highlight NMFC’s defensive positioning rather to this potential issue. As you can see on Page 11, 88% of our portfolio invested in floating rate debt.

Therefore, even in the phase of a material rise in interest rate assuming a consistently shed yield curve, we would not expect to see a significant change in our book value.

Furthermore, as the table at the bottom of the page demonstrates, a meaningful rise in short-term rates will generally increase our NII per share with the only exception being a modest rise having the slightly negative impact as the cost of the majority of our borrowings rise while our interest income does not initially go up given the presence of LIBOR floors on our assets.

Our highest priority continues to be our focus on risk control and credit performance which we believe over time is the single biggest differentiator of total return in the BDC space.

If you refer to Page 12, we once again the layout the cost bases of our investments with the current 6-30-2014 portfolio and our cumulative investments since the inception of our credit business in 2008 and then show what has migrated down the performance ladder.

Since inception, we have made investments of over $2.6 billion in 139 portfolio companies, of which only one representing just $6 million of cost has migrated to non-accrual. Over 99% of our portfolio at fair market value is currently rated 1 or 2 on our internal scale.

Pages, 13 and 14 shows leverage multiples for all of our holdings above $7.5 million when we entered an investment and leverage levels for the same investment as of the end of the current quarter.

Well, not a perfect metric, the asset-by-asset trend and leverage multiple is a good snapshot of credit performance and helps provide some degree of empirical, fundamental support for our internal ratings and marks.

As you can see by looking at the two tables, leverage multiples are in almost all cases trending in the right direction with only two exceptions. Page 15, details the $0.12 special dividend we have announced.

This dividend is driven by the monetization of our equity position in Learning Care Group, the second largest nursery school and child care provider in the country. As you can see, we have received nearly $6 million of gains on warrants with an initial basis of under $300,000.

In keeping with best practice, given the absence of other net losses so far this year, we have elected to distribute this gain to our shareholders. As I touched on in my opening remarks, we are very excited to report that we received the approval for a license from the SBA for our first SBIC.

SBA debt is an attractive form of financing and that it is termed out for 10 years, fixed, a competitive all-in interest rate of approximately 4% and importantly subject to exemptive relief does not account towards our statutory 1 to 1 leverage cap allowing us to run at modestly higher aggregate leverage enhancing our return on equity.

All else being equal, we would anticipate that the addition of the SBA facility, once fully ramped will contribute an incremental $0.04 to $0.08 to our annual NII. Another anticipated NII enhancing accomplishment in the last quarter was the establishment of our first senior loan program our SLP-1.

SLP0-1 is a $368 million pool of capital established and managed by NMFC for the purpose of investing in syndicated loans that fit within our traditional investment planners but they have absolute yields that are too low for the BDC.

SLP-1 is funded with $275 million of attractively priced and structured debt from Wells-Fargo and $93 million of equity. Over three quarters of the equity is coming from third-party institutional investors with the balance supplied by NMFC.

While the standalone return on NMFC’s investment in SLP-1 are attractive in their own rights was particularly compelling about this vehicle for the BDC is that the management fees anticipated to be approximately $1.7 million annually will flow up to NMFC. These fees can become quite meaningful if we were able to add additional SLP vehicles over time.

With the SBA and SLP, are anticipated to generate meaningful incremental NII for NMFC in the coming quarters.

In the first instance, we expect to utilize these enhanced economics to offset whatever asset spread compression we experience in the future if any, beyond that, we believe these incremental economics may lead to a higher level of sustainable NII and in turn, a higher dividend.

In addition, we continue to explore a number of additional strategic initiatives that we believe may further enhance our future earnings. The Chart on Page 18 helps track the company’s overall economic performance since its IPO. At the top of the page, we show how the regular quarterly dividend is being covered out of net investment income.

As you can see, we continue to more than cover 100% of our cumulative regular dividend out of NII. On bottom of the page, we focused on below the line items. First, we look at realized gains and realized credit and other losses.

As you can see looking at the row highlighted in green, we had success generating real economic gains in every quarter through a combination of equity gain, portfolio company dividends and trading profits. Conversely, we have had only one material realized loss representing the realized fall off of $4.3 million on ATI in 2013.

Beyond that, the numbers highlighted in orange show that we are not avoiding non-accruals by selling poor credits at a material loss prior to actual default. The net cumulative impact of this success to-date is highlighted in blue which shows cumulative net realized gains of $28.1 million since our IPO.

Next we look at unrealized appreciation, and depreciation. As you can see highlighted in grey, we have cumulative net unrealized appreciation, or $28 million.

Finally, we combined net realized with unrealized appreciation to derive the final line of the table, which in the yellow box shows the current cumulative net realized and unrealized appreciation of $56 million.

The point here is to show that on both the realized and combined realized unrealized basis, we have consistently and methodically more than offset any credit losses or impairments below the line gains elsewhere in the portfolio.

In fact, by this methodology we have now built a $56 million cushion to offset any future credit losses, some of which we have paid out as special dividends.

While market-driven volatility around unrealized appreciation and depreciation may cause the bottom-line number to vary over time through economic gains and losses we will accumulate in the realized bucket where we will strive to retain a positive balance.

Moving on to portfolio activity, as seen on Page 19, we had another active quarter for originations in Q2. We made significant investments in eight portfolio companies and had total growth originations of $158 million. Repayments in Q2 were quite small totaling $22 million.

We funded some of the originations with asset sales of $9 million resulting in net originations of $127 million. As shown on Page 20, we have had an active start to Q3 with investments of $87 million. Given the robust pace of net originations in Q2 and early Q3, we are currently operating at the high end of our target leverage range.

We expect to fund our near-term origination pipeline out of near-term portfolio repayments where we had visibility on a number of expected repayments in the coming weeks.

As always, any decisions around further balance sheet expansion will be a function of the balance between additional portfolio repayments and attractive origination opportunities all within the context of keeping those balance sheets full levered within our target range in order to maximize our return on equity.

Pages 21 and 22 sow the impacts of Q2 investments and disposition activity on asset type and yields respectively. Both asset origination and repayments were weighted towards first lien investment. Yields on originations were lower than those on disposals and very modestly lower than the portfolio as a whole.

The net impact is that portfolio yield overall is slightly down from 10.9% to 10.7%. In terms of the portfolio review on page 23, the key statistics as of 6/30 looks very similar to 3/31. The asset mix remains roughly even split between first lien and non-first lien.

As always we maintain a portfolio comprise of companies in the definitive growth industries like software, education, services and healthcare that we believe will outperform in an uncertain economic environment.

Finally, as illustrated on Page 24, we have a broadly diversified portfolio with our largest investment in 3.5% of fair value and the top 15 investments accounting for 44% of fair value consistent with past quarters. With that, I will now turn it over to our CFO, Dave, Cordova to discuss the financial statements and key financial metrics.

David?.

Thank you, Rob. For more details on the financial results in today's commentary please refer to the Form 10-Q that was filed last evening with the SEC. Before we turn to Slide 25, I want to remind everyone that during Q2 2014, we completed our corporate structure collapse. Please refer to the Form 10-Q for more information.

The updated corporate structure is provided as a reference in Appendix-B of the presentation. Now I would like to turn your attention to Slide 25. The portfolio had just over $1.3 billion in investments at fair value at June 30, 2014 and total assets of just under $1.4 billion.

We had total liabilities of $595.6 million of which the total debt outstanding was $568.1 million.

Net asset value of $762.6 million or $14.65 per share was up $0.12 from the previous quarter, largely due to net realized and unrealized gains of approximately $0.10 per share and adjusted net investment income for the quarter exceeding our dividend by $0.02 per share.

As of June 30, our debt-to-equity ratio was 0.74 to 1, which is at the high end of our target range. The weighted average debt-to-equity ratio during the quarter was approximately 0.63 to 1.

As a reminder, our Wells Fargo credit facilities covenants are generally tied to the operating performance of the underlying businesses that we lend to rather than the marked up of our investments in any given time.

On Slide 26 we show the historical NAV per share and leverage ratios, which highlights the upward trend in NAV per share since inception and leverage ratios probably consistent with our target leverage of between 0.65 to 0.75 to 1.

We also show the NAV adjusted for the cumulative impact of special dividends, which portrays a more accurate reflection of true economic value creation. On Slide 27, we show our quarterly income statement results.

We believe that our adjust in NII which excludes the capital gains incentive fees is the most appropriate measure of our quarterly performance. This slide highlights that while realizations and unrealized appreciation, depreciation can be volatile below the lines, we continue to generate stable net investment income above the line.

Focusing on the quarter ended June 30 2014, we earned total investment income of approximately $33.7 million. This represents an increase of $3 million or 9.8% from the prior quarter largely attributable to an increased asset base and higher prepayment fees.

Total net expenses of $15.1 million increased $2 million or approximately 15% due to an increase in incentive fees and management fees associated with the NII and asset growth as well as an increase in interest expense associated with the higher average debt balance.

Net administrative, professional and other general and administrative expenses were up approximately $800,000 million primarily related to $300,000 of additional one-time expenses related to strategic initiatives and approximately $300,000 of indirect that are reimbursable to the administrator.

This results in second quarter adjusted NII of $18.5 million or $0.36 per weighted average share which exceeds the high end of our guidance provided on May 8 2014 of $0.33 to $0.35 per share and more than covers our Q2 regular dividend of $0.34 per share.

Shifting to below the NII line, we had adjusted net realized gains of $4.7 million primarily driven by gains from the sale of the Learning Care warrants net of a trading loss from one investment. Adjusted unrealized gains of $2.1 million were largely driven by higher margin on our broader portfolio.

The provision for income tax relates to the unrealized appreciation of investments and the company’s corporate subsidiaries. As a result, the net realized and unrealized gains in the quarter, we increased our capital gains incentive fee accrual, by approximately $1.3 million.

In total, for the quarter ended June 30, 2014, we had a net increase in net assets resulting from operations of $23.7 million. As slide 28 demonstrates, our total investment income is predominantly paid in cash.

Though the amount of prepayment fees vary from quarter-to-quarter based on repayments, our historical earnings have consistently shown some material prepayment fee income.

Therefore, we show total interest income as a percentage of total investment income so it’s with and without prepayment fees which is one measurement of the stability and predictability of our investment income. Turning to Slide 29, as briefly discussed earlier, our adjusted NII for the second quarter more than covered our Q2 dividend.

Given our belief that our Q3 NII will fall in the previously declared expected range of $0.33 to $0.35 per share, our Board of directors have declared a Q3 2014 dividend of $0.34 per share in line with the past nine quarters.

The Q3 2014 quarterly dividend of $0.34 per share will be paid on September 30, 2014 to holders of record on September 16th, 2014. Additionally, due to the realized gains from the sale of the Learning Care warrants, our Board of Directors have declared a special dividend of $0.12 per share.

The special dividend will be paid on September 3rd, 2014, to holders of record on August 20th, 2014. On Slide 30, we highlight our various financing sources which now includes the convertible notes issued in corporate revolving credit facility closed in June 2014.

Taking into account, the first year of leverage of SBIC debentures from our recently announced SBIC license we now have $735 million of total pro forma borrowing capacity, of which approximately 26% would represent fixed rate debt and approximately 74% would represent floating rate debt. At this time, I would like to turn the call back over to Rob..

Thanks, Dave. Well, once again, we do not plan to give explicit forward guidance. It continues to remain our intention to consistently pay the $0.34 per share on a quarterly basis for future quarters, so long as the adjusted NII covers the dividend in line with our current expectations.

In closing, I would just like to say that we continue to be extremely pleased with our performance to-date. Most importantly, from a credit perspective, our portfolio continues to be very healthy. Once again, we like to thank you for your support and interest and at this point turn things back to the operator to begin Q&A.

Operator?.

Thank you. We will now begin the question-and-answer session. (Operator Instructions) Our first question comes from Greg Nelson of Wells Fargo Securities. Please go ahead..

Hey guys, congrats on a great quarter and thanks for taking my questions.

Just quickly on the senior loan program, when we are thinking about that, and you guys obviously controlled what goes in it and we have a minority equity position how are you able to do that and maintain it still as an off balance sheet investment?.

So, it really revolves around the 24.9%, really sub 25% ownership as well as something called a kick out which as a technical matter allows the majority equity folks to kick that out no fault before and you see that in a lot of situations. So, that’s really what drives the non-consolidation of those factors..

Perfect and then just thinking about that a little bit more broadly and you kind of left the door open as far as doing more in the future, when you guys think of the trade-off this regarding resources allocated to putting these funds together, stuff like that for a 12% ROE plus 50 BPS on equity.

How do you kind of view that in the context of broader portfolio and how many more do you think you would do?.

Remember what we are doing with this is we are – and really what the genesis of this was is that we were seeing a lot of – what we thought were interesting risk credits opportunities in deals where we fully underwritten them for private equity or where we done the credit underwritings and/or done the credit writing for the BDC from a second lien perspective.

So, the incremental work – we are not out there like looking for brand new things that we had at the start from Square one on, either things that there is flow, that we can harvest pretty efficiently and the question really was, so the assets where they are, the question was what was the right vehicle and this is kind of what we came up with as the right vehicle that the safest vehicle the most efficient vehicle, a vehicle that allows for an attractive rate of return to our institutional equity partners and that also generates meaningful sustainable multi-year fee income for the BDC that allows us to enhance the ROE.

So, I guess, the short answer to the question is, it’s not a ton of extra work.

But that being said we are bringing the relevant resources to bear and as our market cap and asset base continues to increase, we’ll continue to reinvest in the business and make sure that we have the necessary resources to continue to optimize outcomes for the shareholders..

Okay, great. And then, congrats on getting the SBIC license.

And, I thin in past you guys have mentioned that about 50% of your investments fit, was that kind of still what you guys are thinking?.

Yes, yes.

I mean, the – frankly the ability to ramp the SBIC will not be a function of deal flows, it will be a function of the various gates that won’t go through the SBA as you know, there is, the first license entitles you to $150 million of capital, but even to get there after the first $75 million is deployed that’s sort of – again the SBA does a comprehensive audit of the portfolio before getting you the second $75 million.

And then obviously after the first $50 million to get to the full $225 million once you need to go through a whole licensing procedure. So that will be – that is – we expect that to be the constraint driving that 18 to 24 month timeline versus the flow that we have to support the qualifying asset if you will..

All right, great. That’s all from me. Thanks guys..

All right, great. Thank you..

Our next question is from Chris Kotowski of Oppenheimer. Please go ahead..

Hey, Chris..

Hi, I want to get a bit more color on the senior loan fund and the – I guess, first question is, the $1.7 million annually, is that your share or is that the whole management fee or through the other 75.1% owners not have a right to any interest in the fee?.

No, we get a 100% of the fee. .

You get a 100% of the fee. Okay..

Because we are doing a 100% of the work, so, it’s a vehicle that we are managing and like any other asset management entity it pays a market-driven fee. We happen to be instead of running that fee to our management company; we are running it through the BDC for the benefit of the shareholders..

Okay. And so, and the way you calculated the 12% anticipated yield that would be if you have an investment in the $23 million of equity, the 1.7 would be 7% of that and so then you are anticipating a yield of 5% on …..

No, no, no, no – good question, to be super clear, the 12% is what you get before the fee. So, the $2.3 million of yielding approximately 12% both for us and for institutional investors. Separate and apart from that, we are getting the fee. So, if you wanted, I stick it together you can say, well, another 1.7 on 23 is what is that 7% or so, 8%.

That would to get to 20% including the fee.

But we – obviously they are different streams, right, there is one that’s a return on capital where you are taking risk on your capital, the other just like fee for performing work where you are not utilizing capital and obviously, over time to the extent we can get more of that flowing through the BDC that’s very – I think it’s somewhat unique and it’s very meaningful from an ROE perspective because its revenues that doesn’t require any capital..

Okay.

And you indicated that – okay, you could expand this in the future would expansion mean adding additional vehicles like it or just expanding this vehicle?.

No, the respectively stacking vehicle for this is an entity that gets ramped up over – call it four plus or minus months and then these are loans that turn the way regular loans, they are five to seven year loans, they probably have three to four year average life.

So, once you are fully ramped, you are monitoring it but you are not having to – you are replenishing maybe a quarter of the assets every year.

So, you, at that point have room to create a similar vehicle that you would ramp up the same way and again these things can sort of stack so you can envision doing a couple of these a year in winding up with three, four of them over time. And these are five year investment partnerships. So, they have a pretty good life to that..

Oh, they have a life but it’s finite?.

Yes. It’s a finite life..

Okay, all right. That’s it for me. Thank you..

You are welcome..

(Operator Instructions) And our next question is from Troy Ward of KBW, please go ahead..

Hey, Troy..

Hey, good morning. Very nice results on the quarter, some important strategic initiatives here.

Just couple other quick ones on the SLP, so, it’s a five year life, is it re-investable through five years? Or is that the end maturity is – how long is the reinvestment period?.

Three year investment period, option for one year, extension to go to four years. Five year final life with options to extend beyond that..

Okay, great.

And then, as you talked about in your returns stacking additional ones on what is a gating factor for getting SLP 2 or whatever? Is it equity participation? Is it the ability to get leverage? Is it the asset side? What do you see is the kind of the gating factor to doing additional?.

Probably, the equity is always the trickiest thing to raise, but that being said, we’ve got a pretty I think powerful network of relationships in the institutional community and I think people think we are doing a good job.

So I think, we have reasonable confidence that we can raise the equity and we can raise the debt and that the assets if the spreads compress to a level at some point if it comes uneconomic. But right now, even though spreads have compressed a fair bit, we can still make this work.

I mean, if you think about it, we are competitive with CLO is right our cost of debt for three quarters of the capital structure is pretty competitive plus 155 is not far off from where triple A pricing is happening.

And, what we are able to do, is to really because we don’t have the constraints of a CLO around diversity and around ratings, we are able to be pretty nimble focused on the sectors and concentrating areas that we know and like have a more, what was still diversified not 100 names right it’s going to be 25 or 30 names all in areas in the companies that we know.

And we are able frankly to arbitrage a little bit around the things that CLOs don’t like. Moody’s and S&Ps are great, but they are not perfect.

In sometimes they may, in our judgment, improperly raise something at the B3 or as a low recovery factor or whatever else that maybe and while that vast majority of the loan market really cares about that, we don’t. So, that’s kind of how we are view that, Troy..

Can you speak to how you can protect the return in this – in the phase of rising rates? Obviously, with the leverage here to multiple of the equity with no flow or the LIBOR 165 with no floor, the assets most likely will be sitting on floors in a lot of cases.

Is there is some way you can mitigate or protect your 12% residual income return on the equity?.

We obviously have that. I think the short answer is no. I think we looked at that, I think that, obviously the scenario that hurts us is that, if the average floor is 100, right? And LIBOR 25, so as LIBOR goes from 25 to 100 it starts to hurt us, but not by a lot and then obviously as LIBOR rises above 100, we get the benefit of that.

So, I think over the life, unless you think it’s going to LIBOR, it’s going to go to 75 or 100 and just sit there forever. We think it’s a balanced; there is much upside, downside there. And just to be clear, the 12% is inclusive of the forward LIBOR curve including the painful part where rates are rising on our liability but not on our assets..

So, that’s built into that assumption already to some degree?.

That is correct, yes, assuming rates fall the exact trajectory of the forward LIBOR curve. They could be worst for us, or better for us, but it’s obviously the forward curve is the best approximation we can use.

So, if we didn’t – if we run this, LIBOR never moves, we do a little bit better so the – including the forward curve has some marginal amount but that’s factored into that 12%..

Okay, great. That’s great color. And then on the SBIC on the Slide and I apologize if you’ve answered this already, but the slide said you’ve already funded $35 million.

Can I assume that, should we assume that you are going for the full license, so you are going to fund $75 million of regulatory capital before you draw down on debentures?.

We can do 37.5 and then we can draw on debentures and then we can do the next – so we don’t have to do the full 75..

Okay, I understand.

So, when – did you say when you anticipate drawing on the debentures, fairly soon I would think?.

Yes, it’s very soon..

Okay, great. All right, guys. That’s all for me. Thanks..

Great, thanks, Troy..

Our next question is from Robert Carp [ph]. Individual investor, please go ahead..

Yes, congratulations on some of the accomplishments this quarter, but if you could just help us understand currently you mention that spreads are – credit spreads are wider, based on volatility in the markets, which certainly in the high yield market they are.

You are distributing out $0.12 additional cash rather than reinvesting that into opportunities right now and I counter that to – I guess about a quarter ago.

When credit spreads were tight, and then you turned around stock offering that after expenses it was probably at a discount to book value, what’s the discounted book value after expenses? So how do we look at that? Why aren’t you keeping this cash now and reinvesting or alternatively should we assume that you have no further need to do stock order offerings in the immediate future?.

So, there is a couple of things. So, let’s start with credit spreads, so to be clear, credit spreads compress from April through current date. The volatility we are referring to is – they were compressed even more but for the last two weeks, but just point-to-point if you go, April 30 to August 4, credit spreads are down.

So, it’s not the case that it’s – that the credit spreads are wider today than they were in April. So if I imply that, I apologize..

But I am talking about opportunity set looking forward based upon the current environment you don’t….

Well, our opportunity set is partly driven by market spreads and it’s partly driven by our ability to find this author on or small and mid-cap opportunities are opportunities that flow to us because of our large network driven by the big organization that we were part of. So, we have opportunities then, we have opportunities now.

Now, relative to the $0.12, that we have to pay that money now. That’s because, we have to pay out effectively a 100% of out taxable income and that’s taxable income. Whether we pay it out, August or December, it’s going to get paid out.

So, our policy has always been, we don’t want to deploy that money and then have to sell something four months later to pay it out. So, we view that as shareholder money and while we would use it in the first instance to offset any taxable losses on – that would offset again, we don’t have that right now.

So, we think the shareholder firmly think to do is to pay that out because we can’t hold on to it from a reinvestment perspective. So, whether or not, we raise equity in the future, as I said, many times and said on this call, it will be solely a function of the universe of attractive investment opportunities relative to our repayment.

We fund our attractive opportunities first out of repayment and obviously, we’ve always maintained full leverage and it’s in the context of full leverage, the opportunity set is greater than the repayment flow, we’ll issue equity, if not we won’t..

Thank you..

You are welcome..

And this concludes our question-and-answer session. I would like to turn the conference back over to Rob Hamwee for any closing remarks..

Great, well, thanks everyone. We appreciate the time, that was a busy couple of days in the BDC land with earnings and look forward to talking to everyone again soon. So, thank you and this concludes the call..

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect..