Good afternoon, ladies and gentlemen, and welcome to the KCAP Financial, Inc. Second Quarter 2014 Earnings Conference Call. An earnings press release was distributed early today. If you did not receive a copy, the release is available on the company's website at www.kcapfinancial.com in the Investor Relations section. [Operator Instructions] As a reminder, this conference call is being recorded today, Wednesday, August 6, 2014. This call is also being hosted on a live webcast, which could be accessed at our company's website, www.kcapfinancial.com, in the Investor Relations section under Events. In addition, if you would like to be added to the company's distribution list for news, events, including earnings release, please contact Denise Rodriguez at (212) 455-8300. Today's conference call includes forward-looking statements and projections, and we ask that you refer to the KCAP Financial's most recent filings with the SEC for important factors that would cause actual results to differ materially from those projections. KCAP Financial does not undertake to update its forward-looking statements unless required by law. I would now like to introduce your host for today's conference, Mr. Dayl Pearson, President and Chief Executive Officer of KCAP Financial. Mr. Pearson, you may begin.

Thank you, all, for joining KCAP Financial for a review of our second quarter 2014 results. This afternoon, I will review some of the important highlights and activities in the second quarter, as well as provide some context for our direct lending business and the performance of our asset managers. I will then turn the call over to our Chief Financial Officer, Ted Gilpin, who will provide a recap of our second quarter operating results and our financial condition at the end of the quarter. We will then open the line for your questions at the end of our call. The presentation outlining few of the key accomplishments in the quarter can be found in the IR section of our website. First, let me provide a brief recap of some important highlights from the second quarter, which are summarized on Page 3 of our earnings presentation. In the second quarter of 2014, net investment income, or NII, was $0.24 per share compared to $0.24 in the first quarter and $0.24 in the fourth quarter. Our second quarter shareholder distribution was $0.25 per share, unchanged from the first quarter. I would now like to discuss the performance of our loan and securities business and asset manager affiliates in more detail. After a strong first quarter and quality originations, the pace of high-quality opportunities moderated in the second quarter. Since June, we have seen a better quality of deal flow resulting in a very solid pipeline of new deals for the third quarter. I continue to believe that our platform and team are well positioned to drive sustained origination growth at attractive yields. Specifically, as can be seen on Slide 4, we invested $16.7 million in new originations in the second quarter at an expected to return approximately 11.3%. This is primarily…

Thank you, Dayl, and good afternoon, everyone. I would like to start by covering some of the high-level financial information and then go into a little more detail on specific metrics. As of June 30, 2014, our net asset value stood at $7.67, up 2.1% from $7.51 at the end of 2013. The company declared a $0.25 distribution in the second quarter, which is consistent with the level paid in the first quarter of 2014. Net investment income was $8 million or $0.24 per basic share for the second quarter of 2014, consistent with the first quarter. At this point, I'd like to review the component pieces of net investment income for the 2014 second quarter. First, interest income on our debt securities for the 3 months ended June 30, 2014, was $5.17 million or $0.15 per share compared to $5.25 million and $0.16 per share for the quarter ended March 31, 2014, and compared to $3 million and $0.09 per share in the second quarter of 2013. And as Dayl mentioned earlier, investments which we have made in our direct lending platform have driven an acceleration in deal flow over the last several quarters, resulting in a better balance across our 3 main sources of net investment income. As a result, our debt securities portfolio has expanded as a percent of total investment income that today stands at 40% versus just under 27% of investment income in the second quarter of 2013. Second, distributions from investments in CLO securities of $4.92 million or $0.15 per share in the second quarter of 2014, which is consistent with the first quarter of 2014 and the second quarter of 2013. Lastly, our asset management affiliates distributed $3.3 million -- $3 million even to KCAP Financial or $0.09 per share in the second…

[Operator Instructions] Our first question comes from the line of Mickey Schleien from Ladenburg. Mickey M. Schleien - Ladenburg Thalmann & Co. Inc., Research Division: Just a couple of questions related to the CLO business. Do you expect distributions from the affiliated AMAs to increase in the coming quarter with -- now that the new CLO was closed? And just curious what drove the increase in dividends or distributions from the nonaffiliated CLOs.

Mickey, it's Ted. I'll handle the first one. I mean, I think we've said in that past that we don't necessarily expect to increase the distribution out of the asset manager affiliates. The new CLOs are primarily replacing the old CLOs that are rolling off, and I think that we've expected to maintain that replacement level. And hopefully, add to the it. But I think that the -- what we've sort of said as it's going forward, is just sort of that we would be consistent out of the asset manager affiliates.

Yes, in terms of your other question, Mickey, this is Dayl. The -- we made an investment late last year in an unaffiliated CLO, which had its first significant distribution in the quarter. And so that's -- that was a strategic investment that we made in another manager's CLO. And so that's why you see that increase. Mickey M. Schleien - Ladenburg Thalmann & Co. Inc., Research Division: And Dayl, the tone of the market, could you just talk about the tone of the market in terms of the more broadly syndicated loan market, and in terms of both the spreads and multiples that you're seeing and how comfortable you are investing in the current climate?

Yes, speaking to the broadly syndicated market, I think, look, it's been a very strong market from an issuer perspective this year, partially because there's been lots of inflows of money, lots of CLOs have been raised. That being said, right now we're seeing a lot of new issue coming to market. And so there seems to be a pretty good balance, and the market is back up a little bit over the -- as the equity market sat [ph] over the last couple of weeks. So we actually think and -- it looks -- multiples are higher than they were, but they're not -- we don't invest in every loan. One of the advantages of being a relatively small manager is, unlike very large managers who sort of have to buy the market, we don't have to buy the market and we can be selective. So there are plenty of opportunities that fit the parameters from the credit perspective. Mickey M. Schleien - Ladenburg Thalmann & Co. Inc., Research Division: And are you satisfied with the quality of the deal flow in terms of -- are you seeing more M&A and growth capital versus refinancings and dividend recaps?

To some extent, yes. Certainly recently, there are a lot of larger transactions, which are going to significantly impact the market, so -- which we haven't had in a while.

Our next question comes from the line of Paul Floto [ph] from -- he's a private investor.

On your investment portfolio, your cost compared to fair value is quite good except in your CLOs and your equity securities and, to a slight extent, asset manager. The equity securities that are down, you've had a 46% loss. Is that a historical artifact of a long time ago or...?

Yes, that relates primarily to some investments we made in 2006 and 2007, which for a number of reasons, we haven't been able to write off to date, but primarily are held at very, very small values, so...

And the CLO was the same thing to that extent that some of those are very old?

Well, again, the CLOs, particularly the older CLOs, as they delever, some of those -- some of the older ones that we don't manage have gone down significantly in value for a number of different reasons. When incentive fees start getting paid and we're the beneficiary of the incentive fees of the asset management, that obviously reduces distributions in CLO equity and causes the value of the CLO equity to fall as well. And over time, very often, those things do trend downward.

Our next question comes from the line of Hannah Kim from JMP Securities.

I'm actually calling in for Chris York. And if I heard correctly, earlier you mentioned that one of the asset was actually removed from the nonaccrual list. And I just wanted to confirm, is that a coactive technology?

That's correct. And we actually received a payment this week, I believe, which essentially brought us current on all interest and actually reduced the principal amount. And we expect there's a reasonable opportunity that it's going to be refinanced soon.

Okay, great. And then my -- another question is regarding your investment in Gymboree Corporations. I realize that the fair value declined slightly this quarter. Last quarter, it was marked at 93%; this quarter, it is marked at 88%. I was wondering if you can provide a little bit of color as well as your expectation for the future performance of this investment.

I can't really comment on what are our expectations on future performance. That really represents a mark -- they had a weak quarter. And it's in the retail sector and it's a very small position. They had a weak quarter and the market reacted very negatively, and we'll have to see how it is -- performs. We think from an overall credit perspective, it's still a reasonably good-quality credit.

[Operator Instructions] Our next question comes from the line of Troy Ward from KBW. Greg M. Mason - Keefe, Bruyette, & Woods, Inc., Research Division: This is Greg. I wanted to follow-up on the nonaccrual question. Are you going to have any kind of catch-up income that's going to hit the income statement next quarter from the coactive repayment?

At it a bit. I mean, it's not going to -- again, it's a small position, and it was not accruing at an exceptionally high level. But there will be some income that comes in. Greg M. Mason - Keefe, Bruyette, & Woods, Inc., Research Division: Okay. And then you said you had a couple other exits or sales of nonaccruals. Can you give us a little bit more detail on maybe what those are? And more importantly, how much capital did you get back that you can reinvest?

Not very much. We were carrying it with very, very small values. It was 2 very old real estate investments from '06, Gin [ph] and SunCal. It's up about $100,000 over where we had them marked, but they were marked pretty low, so. Greg M. Mason - Keefe, Bruyette, & Woods, Inc., Research Division: Got it, all right. And then on the -- with regarding the CLO asset manager, can you talk about how the income, the $3 million of income compared to the cash flow generation in the quarter from the asset manager?

Yes, I would say it's pretty consistent with what their cash flows were. We didn't -- we weren't holding anything back. I think -- we thought that their cash flows would be lumpy this year. We sort of thought that we'd be distributing what we're distributing now, but pretty much their cash flow has been even with what we've been distributing. Greg M. Mason - Keefe, Bruyette, & Woods, Inc., Research Division: Okay, great. And then just one final thought. Good job closing the CLO, now moving on to what's the market like for closing the next one? And your thoughts on timing around that?

Yes, unfortunately, we can't really comment on that. As you know, Greg, the CLOs, they're sold through -- distributed through a private placement process. And right now, we're in a period in that process where we're not allowed to make any commentary.

[Operator Instructions] And our next question comes from the line of Sam Hayes from Harvard Business School.

I had actually 2 questions but they both relate to the sustainability of the dividend. I keep reading commentaries about KCAP, which mentioned their vulnerability to increasing nonperforming loans. I've been a shareholder for a number of years and I have had -- seems that your nonperforming loans have never been more than 1%, as you mentioned on this call. But what would be the areas that might be vulnerable to an increase in nonperforming loans, which might threaten the dividend? That's the first question. The second question is, I understand that you've now obtained permission to sell additional shares below the net asset value, and what are the plans for that?

Sam, this is Dayl. I'll -- not to steal Ted's thunder, but I'll take those 2. I think it's very hard to comment on what people -- rumors there may be. I mean, obviously, right now we have almost no nonaccruals. There are always some things that we watch closely. We don't really anticipate any additional nonaccruals. But obviously, we're in a risk business and especially as the economy changes, that can change as well. But again, right now, the portfolio is in probably as good a shape as it's ever been. So I don't know where those comments are coming from. In terms of selling shares below NAV, we're trading above NAV at the moment. We have generally gone out each year to get approval to sell shares below NAV, as a lot of BDCs have done. And the reason for that is really sort of more defensive and an insurance policy in case something happens and the market significantly sells off. And for one reason or another, having been through a very serious credit crisis in '08 and '09, we just want to have the flexibility to deal with the crisis if such a crisis occurs. We don't anticipate that. But we have no plans to sell shares below NAV at the moment.

But did you receive the permission to do so or...

Yes, we did. We did receive permission. As we have pretty much every year going back to 2008.

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to management for any further remarks.

We don't have anything else to say, but we appreciate everyone taking time, and we'll talk to you next quarter. Thank you.