Good morning, and welcome to the CION Investment Corporation's Third Quarter Ended September 30, 2022 Earnings Conference Call. An earnings press release was distributed earlier this morning before market opened. A copy of the release, along with a supplemental earnings presentation is available on the company's website at www.cionbdc.com in the Investor Resources section and should be reviewed in conjunction with the company's Form 10-Q filed with the SEC. As a reminder, this conference call is being recorded for replay purposes. Please note that today's conference call may contain forward-looking statements, which are not guarantees of future performance or results that involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in the company's filings with the SEC. Speaking on today's call will be Michael Reisner, CION Investment Corporation's Co-Chief Executive Officer; Gregg Bresner, President and Chief Investment Officer; and Keith Franz, Chief Financial Officer. With that, I would now like to turn the call over to Michael Reisner. Please go ahead, Michael.

Thank you. Good morning, everyone, and thank you for joining us. As mentioned, I'm joined today by Gregg and Keith, as well as other members of senior management, including my Co-CEO, Mark Gatto. I will start our call today with an overview of our third quarter results. Gregg will review our investment activity during the quarter, and Gregg will provide additional detail on our financial results. After Keith's prepared remarks, we will open the call to questions. As reported this morning, we had another solid quarter in our financial performance, as we reported higher investment income, net investment income and net asset value as compared to the second quarter of 2022. This was due to the successful execution of the plan we have previously laid out and have consistently communicated, which is to organically grow our portfolio through a measured strategy, aiming to provide excellent risk-adjusted returns to our shareholders by focusing on senior secured first lien loans to quality companies, while remaining disciplined and not reaching for yield. As we communicated to you all since our listing in October 2021, when we felt like we were headed into a recession, we worked hard to build an investment portfolio to expand these turbulent times and are quite pleased how we outperformed to-date, notwithstanding the challenging macroeconomic environment in which we find ourselves. In terms of credit quality, our high quality portfolio continued to improve in the third quarter, with one name coming off nonaccrual status and no new names being placed on nonaccrual. Nonaccruals, in general, were relatively low when compared to the total fair value of our investment portfolio and accounted for just 0.4% and 1.7% of the overall portfolio at fair value and amortized costs at quarter end. Our credit quality metrics remained solid in the face of…

Thank you, Michael, and good morning, everyone. The challenging bifurcated market conditions of the leverage finance ecosystem that we experienced in Q2 of this year continued into Q3. There remained a clear distinction between the syndicated and direct investing markets. As syndicated market conditions continue to deteriorate, with declining new issue activity, higher volatility and spread widening, private direct lending continued to expand its market share with robust issuance and yield opportunities. U.S. leveraged loan issuance plummeted in Q3, as the plethora of economic and geopolitical challenges, such as surging inflation, rising interest rates and loan outflows, directly impacted primary market activities. The $21.4 billion in institutional loan issuance was the lowest amount since the fourth quarter of 2009 when the loan market ground to a halt in the aftermath of the great financial crisis. The total return on the composite Morningstar LSTA U.S. Leveraged Loan Index increased 1.4% during Q3, but cumulatively declined 3.25% on a year-to-date basis through September 30, 2022. Average bid pricing for secondary loans finished at 92.23% on September 30, down from 92.39% on June 30 and 98.71% on December 31, 2021. The yield to maturity increased over 400 basis points from 4.2% at 12/31/21 to 8.47% on September 30, 2022. Liquidity has clearly tightened in the syndicated loan market. Cash outflows to prime loans totaled $14.6 billion in Q3. With additional $5.8 billion in outflows in October 2022, the year-to-date cumulative total is now $5.3 billion of cumulative outflow, a sharp reversal from the nearly $25 billion of inflows from January to April of 2022 and the seemingly ends inflows of previous years. It was markedly different for direct private lenders as firms such as ours took advantage of the dislocation in the syndicated market to continue to build and expand market presence and…

Okay. Thank you, Gregg, and good morning, everyone. As Michael mentioned, we reported another quarter of strong financial results, driven by an increase in LIBOR and SOFR rates and additional fees generated from our quarterly investment activity. During the quarter, net investment income was $25.6 million or $0.45 per share, an increase of $6.3 million or $0.11 per share as compared to $19.3 million or $0.34 per share reported in the second quarter. Total investment income was $54.2 million, an increase of $10.6 million or 24% when compared to $43.6 million reported during Q2. On the expense side, total operating expenses were $28.6 million compared to $24.3 million in the second quarter. The increase in operating expenses was primarily driven by an increase in interest expense under our financing facilities due to higher LIBOR and SOFR rates and an increase in advisory fees when compared to the prior quarter. At September 30, we had total assets of approximately $1.9 billion and total equity or net assets of $915 million, with total debt outstanding of $958 million and 56.3 million shares outstanding. As a result, at the end of the quarter, our debt-to-equity ratio was 1.05x, which is consistent when compared to the June quarter. At September 30, our NAV was $16.26 per share as compared to $15.89 per share at June 30. The increase was largely due to mark-to-market changes in our portfolio, overearning our distribution during the quarter and the accretive nature of our stock buyback plan during the period. During the quarter, as part of our previously announced $60 million share repurchase plan, we began purchasing shares in the open market. As a result, during the quarter, we purchased about 695,000 shares of our common stock at an average price of $9.65 per share for a total cost…

Thank you, Keith. As a final thought before we open the line for questions, we'd like to reiterate our message, and we believe CION is well positioned to provide higher returns to its shareholders despite the concerns we discussed regarding current market conditions. And with that, operator, we're ready to take any questions.

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question is from Casey Alexander with Compass Point. Please proceed with your question.

Yes. Hi, I noticed that the leverage ratio stayed stable quarter-over-quarter. What would you like to get the leverage ratio to? And I see that your liabilities have a relatively low percentage of unsecured debt relative to your overall liability stack. Would you like to increase that percentage or at the current level of unsecured rates? Do you feel like that's just too high of a rate to fix that and you'd rather just leave it inside the credit facility? How do you feel about that?

Hey Casey, it's Keith. So in terms of our target leverage, we're looking at about 1.25x. I think that's where we have communicated previously. And in terms of the secured/unsecured mix, we're currently about 22% unsecured. Clearly, we would like to bring that up over time, but we're going to take on new financing transactions very responsibly.

All right, thank you. On the expiration date on the share repurchase program, because you did a little over 10%, I think, of the total authorization, and if there's only three quarters left to it, would it be your expectation that you would be accelerating it from here or is this kind of the tempo and the pace of it that we should expect?

Casey, it's Michael. I think it's probably the pace you should expect at this time.

Great, that’s all my questions. Thank you.

[Operator Instructions] There are no further questions at this time. I'd like to turn the floor back over to management for any closing comments.

Great. Thank you, Paul, and thank you, everyone, who joined the call today. We appreciate your interest in CION. We look forward to speaking to you in early March when we announce our 2022 full year results. Take care, everyone.

This concludes today's conference. You may disconnect your lines at this time and log off your computer. Thank you for your participation.