MidCap Financial Investment Corporation (NASDAQ:MFIC) Q2 2023 Earnings Call Transcript

So, the bigger picture is we have covenants, so we are in dialog, the tone and the pace of amendments has not increased materially as kind of at the same pace as it has been over the last several quarters. But when it does occur we view that as an opportunity as well to either de-risk or enhance the economics.

Kenneth Lee: Got you, got you, very helpful there. And then just one follow-up, if I may, and just to say a follow-up question from everyone about originations, given that you see allow the potential deal flow from the broader MidCap origination platform and perhaps a little bit less depend upon deal flow there or M&A activity. Would it be fair to say that the key constraints to originations over the near-term would be more on the underwritings, finding the appropriate deals, the appropriate returns, leverage constraints, more so than broader industry trends? Thanks.

Tanner Powell: Yes. I mean as we have mentioned, MidCap closed on over $4 billion of new commitments in the last quarter. We get to look at those. We look to see what gets into our portfolio from a diversification standpoint, and obviously from a yield and structure standpoint. So, in terms of constraints to new activity, it’s certainly not the top of the funnel, because we get that via MidCap. What we have continually expressed in terms of leverage is a range of 1-4 to 1-6, and a desire to stay at the lower end of that range. And so, you have kind of seen us in between 1-4 and 1-4-5 over the last several quarters. And so, as we think about deploying into new capital, we are balancing our desire to be in that leverage range with the attractive opportunities that are out there.

Kenneth Lee: Got you, very helpful there. Thanks, again.

Operator: We have no further questions in the queue at this time. I would now like to turn the call back over to today’s speakers.

Tanner Powell: Thank you, Operator. Thank you everyone for listening to today’s call. On behalf of the entire team, we thank you for your time today. Please feel free to reach out to us if you have any other questions. And please have a good evening.

Operator: This does conclude today’s program. Thank you for your participation. You may disconnect at any time.