The company successfully optimized its balance sheet by refinancing its Wells Fargo facility, reducing the spread by 55 basis points and increasing capacity to $200 million.Strategic credit management focuses on large borrowers with a weighted average EBITDA of $436 million, based on the premise that larger companies are better equipped to invest in and benefit from AI efficiencies.The portfolio maintains a defensive posture with software exposure at approximately 11%, significantly lower than the reported ...

FS KKR Capital (NYSE:FSK) Q4 2025 Earnings call February 26, 2026 09:00 AM ET Company ParticipantsAnna Kleinhenn - Head of Investor RelationsDan Pietrzak - Chief Investment Officer and PresidentEthan Kaye - VP of Equity ResearchFinian O'Shea - DirectorMichael Forman - Chairman and CEORobert Dodd - DirectorSteven Lilly - CFOConference Call ParticipantsArren Cyganovich - Specialty Finance Senior AnalystCasey Alexander - Managing Director and Senior Equity AnalystDylan Hines - AnalystRick Shane - Managing Dire ...

FS KKR Capital (NYSE:FSK) Q4 2025 Earnings call February 26, 2026 09:00 AM ET Speaker8Good gentlemen. Welcome to FS KKR Capital Corp.'s fourth quarter and full year 2025 earnings conference call. Your lines will be in a listen-only mode during remarks by FSK. At the conclusion of the company's remarks, we will begin the question and answer session, at which time I will give you instructions on entering the queue. Please note that the conference is being recorded. At this time, Anna Kleinhenn, Head of Invest ...

When I issued my previous article on Blackstone Secured Lending Fund ( BXSL ) titled I Won't Sugarcoat It, Blackstone Secured Lending Is Not A BDC To Buy , there was certainly not a shortage ofRoberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity of pan-Baltic capital markets. Other poli ...

Our return on equity and effective yield rank at or near the top in the BDC space. Our NAV has grown 33% year over year, while our credit metrics have remained strong and consistent. Since our IPO five years ago, Trinity Capital Inc. stock has delivered a cumulative total return of 109%, far outpacing both the peer average of 70% and the S&P 500's 82% over that same time period. Looking forward, we have an ever-growing managed funds business, as well as 209 warrant positions and 130 portfolio companies, wit ...

Financial Data and Key Metrics Changes - Trinity Capital achieved record net investment income of $144 million or $2.08 per share in 2025, with a 15% increase in Q4 net investment income to $40 million compared to the previous year [3][4] - The company's net asset value (NAV) grew 10% quarter-over-quarter to a record $1.1 billion, with a 33% year-over-year increase [5][16] - Total investment income for Q4 was $83 million, reflecting a 17.5% year-over-year increase, and the effective yield remained strong at 15.2% [15][16] Business Line Data and Key Metrics Changes - The managed funds business saw significant growth, with $1.5 billion in fundings and $2.1 billion in commitments for the year [4][6] - The breakdown of Q4 fundings included 27% to sponsor finance, 25% to equipment financing, 20% to life sciences, 15% to tech lending, and 13% to asset-backed lending [20] Market Data and Key Metrics Changes - The company maintained strong credit quality, with non-accruals at less than 1% of the portfolio at fair value [4][19] - Portfolio companies collectively raised over $7.8 billion in equity during 2025, indicating strong access to capital [19] Company Strategy and Development Direction - Trinity Capital is focused on building a diversified platform with five complementary verticals, including sponsor finance, equipment finance, tech lending, asset-based lending, and life sciences [12][14] - The company is strategically positioned to capitalize on opportunities in the market, particularly in the software sector, while maintaining a disciplined underwriting approach [7][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate market volatility and capitalize on opportunities, particularly in the lower middle market software sector [25][36] - The company anticipates continued strong performance driven by its diversified pipeline and disciplined investment strategy [14][21] Other Important Information - Trinity Capital transitioned to a monthly dividend of $0.17 per share starting January 2026, maintaining the same aggregate quarterly payout [15] - The company raised $95 million through its equity ATM program during Q4, contributing to a strong capital base [16] Q&A Session Summary Question: Opportunities in Software Loans - Management acknowledged the potential to capitalize on turmoil in the software sector and indicated a willingness to convert some loans to equipment finance loans for better risk-adjusted returns [23][25] Question: Portfolio Concerns - Management stated that they remain focused on industries with disruptive technology and strong capital backing, and they will continue to adapt their investment strategy as market conditions evolve [30][32] Question: Strategic Opportunities Amid Volatility - Management confirmed that they are prepared to be opportunistic in a volatile market, leveraging their liquidity to take advantage of less competitive conditions [36][37] Question: Fund Management Business Growth - Management expressed optimism about the growth of their third-party asset management business, anticipating increased interest from investors seeking diversification [41][42] Question: Portfolio Capital Raising - Management noted that portfolio companies are accessing capital through various means, including public markets and private equity sponsors, indicating a robust VC market [56][58]

Oaktree Specialty Lending Corporation ( OCSL ) supported its dividend with net investment income in the December quarter, and the BDC now has two consecutive quarters of NII growth under its belt. The investment firm's high non-accrualsAnalyst’s Disclosure: I/we have a beneficial long position in the shares of OCSL, ARCC, OBDC, FSK either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than f ...

Financial Data and Key Metrics Changes - Net asset value (NAV) per share was $11.09, essentially unchanged from the prior quarter at $11.10, reflecting a less than 0.1% decrease quarter over quarter [21] - Net investment income (NII) for the quarter was $0.27 per share, down from $0.32 per share in the prior quarter and $0.28 per share for the fourth quarter of 2024 [25] - The annualized dividend was declared at $0.26 per share, consistent with the prior quarter, equating to a 9.4% yield on NAV [10][28] Business Line Data and Key Metrics Changes - Barings originated positions now constitute 96% of the BBDC portfolio at fair value, up from 76% at the beginning of 2022 [9] - The weighted average yield at fair value was 9.6%, reflecting a slight reduction from the prior quarter due to a decrease in base rates [9] - The net leverage ratio was 1.15x at quarter end, down from 1.26x as of September 30, remaining within the long-term leverage target of 0.9x-1.25x [26] Market Data and Key Metrics Changes - The portfolio remains highly diversified, with 75% consisting of secured investments and approximately 70% of investments being first lien securities [18] - Interest coverage within the portfolio was strong, with a weighted average interest coverage of 2.4 times, above industry averages [18] - Non-accruals accounted for 0.2% of assets on a fair value basis, down from 0.4% in the previous quarter [20] Company Strategy and Development Direction - The company aims to enhance existing initiatives and implement new ones focused on improving return on equity (ROE) [5] - The strategy emphasizes a core focus on the middle market, which is viewed as the most compelling segment for risk-adjusted returns [6] - The company is exploring opportunities in asset-based lending and tactical investments in the broader private credit space [67] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength and durability of the investment process, highlighting a benign credit environment [4] - The outlook for 2026 is cautiously optimistic, with expectations for a banner year for M&A opportunities [17] - Management noted that while declining base rates may put downward pressure on NII, the diversified portfolio and strong capital structure will support earnings [28] Other Important Information - The company reported a net realized loss primarily due to exits and restructures of certain investments, but overall credit quality remains stable [23] - The Sierra portfolio was significantly reduced, with a 75% year-over-year decrease, indicating a strategic focus on income-producing assets [24] - Share repurchase activity contributed $0.02 per share to NAV, with over 450,000 shares repurchased in the fourth quarter [30] Q&A Session Summary Question: What initiatives are being worked on to improve ROE? - Management is focused on accelerating exits from legacy assets and winding down problematic joint ventures to redeploy capital into interest-earning assets [33][34] Question: How will the company address the concerns in the non-traded BDC market? - Management acknowledged the challenges posed by negative headlines but emphasized that flows have remained stable and they are actively engaging with investors to alleviate concerns [42][44] Question: What is the company's exposure to software businesses facing AI disruption? - Management confirmed that they do not have exposure to highly leveraged software businesses vulnerable to AI disruption, maintaining a focus on well-managed companies [71] Question: Will the company consider shifting to GICS for industry classification? - Management is discussing the potential shift to GICS, especially for better comparability with peers [72]

Group 1 - The BDC sector, including Hercules Capital, Inc., has had a poor start this year, indicating potential challenges ahead for these companies [1] - Hercules Capital is perceived as a high-quality BDC that is expected to provide better downside protection compared to its peers [1] Group 2 - Roberts Berzins has over a decade of experience in financial management, focusing on helping top-tier corporates with financial strategies and large-scale financings [1] - Berzins has contributed to institutionalizing the REIT framework in Latvia to enhance the liquidity of pan-Baltic capital markets [1] - His work includes developing national SOE financing guidelines and frameworks to channel private capital into affordable housing [1] - Berzins holds a CFA Charter and an ESG investing certificate, and has interned at the Chicago Board of Trade [1] - He is actively involved in thought-leadership activities to support the development of pan-Baltic capital markets [1]

Core Insights - The article discusses investment strategies focusing on BDC baby bonds, highlighting that yields above 8% were consistently locked in during 2025 due to undervaluation of bonds compared to overvalued common stock [1] Group 1: Investment Strategies - The investment logic was based on the belief that bonds were undervalued while common stock valuations were extremely overvalued [1] - The article mentions the role of Denislav Iliev, an experienced day trader with over 15 years in the field, who leads a team of 40 analysts to identify mispriced investments [1] - The service "Trade With Beta" offers features such as frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, and hedging strategies [1]