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- **Q3 Performance Standout**: $8.8M net investment income (15.5% yield) and 10% share buyback announced post-merger.
- **Portfolio Resilience**: 84.4% first-lien loans at 93.1% par, stress-tested $1.36 per share NAV upside.
- **Debt Management**: Issued $110M long-dated debt to extend maturity, reducing refinancing risk.
- **Strategic Shift**: Reduced PIK income to 14.3% of portfolio, focusing on cash-yielding deals.
- **NAV Dynamics**: NAV per share down 1.9% to $17.55 due to mark-to-market losses and dividend coverage gap.

**【CEO Opening Remarks】**
- Announced strong Q3 results as a combined company post-merger with Logan Ridge, generating $8.8 million net investment income ($0.71 per share) vs. $4.6 million ($0.50 per share) in Q2.
- Launched a $9 million share buyback program targeting 10% of outstanding shares, with management and affiliates contributing to reduce the discount to NAV.
- Highlighted disciplined approach to private credit market, emphasizing sector-specific issues (e.g., First Brands) are not systemic and the company's portfolio remains resilient.
- Approved $0.47 per share base distribution, yielding 15.5% at current price.

**【CIO Investment Portfolio Update】**
- Q3 originations of $14.2 million with 80% new borrowers, achieving 12.5% yield on par vs. 13.8% weighted average yield (10.3% excluding purchase accounting).
- Portfolio diversified across 79 companies and 28 industries, with 84.4% first-lien loans at 93.1% of par.
- 10 nonaccrual investments (3.8% of fair value), including 2 acquired through merger, with 2 generating cash interest.
- Stress testing shows potential $1.36 per share NAV upside under 10% default rate with 7% recovery.

**【CFO Financial Performance】**
- Q3 GAAP net investment income of $8.8 million ($0.71 per share), up 43% YoY, driven by merger-related income of $7.4 million.
- NAV per share declined to $17.55 (from $17.89) due to $4 million mark-to-market losses and dividend coverage gap.
- Leverage ratios improved to 1.4x gross / 1.3x net, with $110 million undrawn credit capacity.
- Issued $110 million in long-dated debt (7.75% 2030, 7.5% 2028) to extend maturity and reduce refinancing risk.

**【Q&A Highlights】**
- Buyback program: $9 million target (10% of post-merger shares), with management contributing $1.2 million in Q3.
- Pipeline activity: Focused on risk-adjusted returns, with limited interest in generic L475/L500 unitranche deals.
- PIK income reduction: From 19.5% to 14.3% of portfolio, reflecting strategic shift to cash-yielding investments.
- Expense management: Q3 expenses up 24% to $10.1 million due to merger-related costs, expecting $1.8 million run rate.
- Purchase accounting: $21 million accretion recognized, with $18 million remaining to be amortized over asset maturities.

Portman Ridge Finance Corporation (BCIC) Q3 2025 Earnings Call Transcript

Interest from Investments in Debt Securities

Payment-in-Kind Investment Income

Investment Income on Collateralized Loan Obligation Fund Securities Managed by Non-Affiliates

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