Good day, and welcome to the TICC Capital Corp. First Quarter 2015 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Jonathan Cohen. Please go ahead, sir.

Thanks very much. Good morning, and welcome, everyone, to the TICC Capital Corp. First Quarter 2015 Earnings Conference Call. I'm joined today by Saul Rosenthal, our President and Chief Operating Officer; Patrick Conroy, our Chief Financial Officer; and Bruce Rubin, our Controller and Treasurer. Bruce, could you open the call today with a discussion regarding forward-looking statements?

Sure, Jonathan. Today's call is being recorded. An audio replay of the conference call will be available for 30 days. Replay information is included in our press release that was released earlier this morning. Please note that this call is the property of TICC Capital Corp. Any unauthorized rebroadcast of this call in any form is strictly prohibited. I'd also like to call your attention to the customary disclosure in our press release this morning regarding forward-looking information. Today's conference call includes forward-looking statements and projections and we ask that you refer to our most recent filings at the SEC for important factors that could cause actual results to differ materially from these projections. We do not undertake to update our forward-looking statements unless required to do so by law. To obtain copies of our latest SEC filings, please visit our website at www.ticc.com. With that, I'll turn the presentation back to Jonathan.

Thanks very much, Bruce. As we noted in our press release this morning, our estimated distributable net investment income EDNII for the quarter ended March 31, 2015 was approximately 0.48 per share. We note that our EDNII represents that portion of our estimated annual taxable income available for distribution to common shareholders that we estimate to be attributable to any period. The company's Board of Directors has declared the distribution of $0.29 per share through the second quarter of this year payable on June 30, 2015 to stockholders of record as of June 16th. We note that at March 31, 2015 our net asset value per share has stood at $8.72 compared with a net asset value at the end of the fourth quarter of $8.64. Again as we noted in our press release this morning we have now changed the methodology that we used to account for income from our CLO equity investments. We note that this change in methodology has no direct or material effect on our net asset value per share or on the determination of the company's quarterly dividend distributions. Starting with our first quarter results for 2015, we have applied the effective of yield method for determining net income under GAAP as opposed to the dividend method used previously. For the first quarter of 2015 TICC reported total GAAP investment income of approximately 21.7 million representing a decrease of approximately 6.8 million from the fourth quarter of 2014. That decrease reflects the lower reported GAAP earnings associated with our CLO equity class investments we welcome from the change in accounting methodology. While reportable GAAP earnings on CLO equity investments were approximately $8.2 million due to the effect of yield methodology whereby we assume that we continue to hold all of our CLO equity positions to…

Thank you very much. We'll now begin the question and answer session. [Operator Instructions] Our first question comes today from Mickey Schleien with Ladenburg.

Good morning guys. I'd like to understand what is your outlook for the loan markets for the rest of the year given how tight things have been so far with dearth of supply and just incredible demand and also what you believe to the best of your ability the impact of the GE exit will be?

Sure Mickey. Our outlook for the U.S. syndicated corporate loan market for the remainder of the year is essentially one where we're looking for then market to tread water to one where we're looking to see some widening in U.S. corporate loan spreads. We've tried to position ourselves into that eventuality in a few different ways, one of which included the debt facility that we took on fairly recently. Where we enjoyed the benefit of what we think is as an attractive cost of capital, and a positive spread between net cost to capital and the syndicated loans we placed into that facility. That said your larger point I think is an accurate one which is that the syndicated corporate loan market remains characterized by very-very tight spreads, a significant amount of demand and less supply than loan participants like us would generally like to see.

So Jonathan what could change in the second half of the year that would allow spreads recuperate a little bit?

Well I think, part of that is going to depend on the overall market for credit globally and the extent to which what is currently a very benign corporate debt environment, a very benign debt environment in generally, becomes somewhat less benign. We begin to see some increase in the fall rates, we begin to see more companies coming to market with more flexibility around the pricing of their loan securities, the debt securities generally. Those are the kinds of things that are going to, in our view, likely [indiscernible] widening of spreads.

Do you think that's already started Jonathan?

The other piece making obviously is the behavior of governments and the monitory policy of the U.S. government and European union and other global [actors] are pursuing and obviously that's been sort of been a single direction for a while now. We don't see at the moment any indication in the market of a widening spread, Morgan. We would like to see some of that we haven't seen any appreciable degree of that thus far.

Alright, I was asking because I had noticed sort of a trend where despite the fact, that in the first quarter, spreads tightened meaningfully, sort of, what we could call credit watch investments have deteriorated. But my last part of my question was any thoughts you have on GE's exit from the lending business given that they had such an attractive cost of capital?

Yes, I think others have made the case that GE's exit from that market, from this market creates the potential for opportunities for middle market lenders, direct bilateral lenders, syndicate loan participants that would be good to see, we'd love to see some enhancement, increased opportunities that we're resolving. From GE's exit, we're not making any actual predictions about that, though at the moment.

The next question is from Greg Mason with KBW.

First on the kind of GAAP tax difference, now that we have GAAP using the effective yield method, is there any time where the tax number gets impacted by the exit of the CLO either, when a CLO's called or something that realizes the loss for tax, that obviously the effective yield of GAAP is showing that there is some type of loss there, with the lower yield, so can you just talk about the tax implications since your dividends is going to be based on the tax number?

The interesting part of this is, in the early years up until some point that there is an exit or liquidation of the CLO. Generally speaking its ordinary income as reported to us on the [indiscernible] statement. If there is a capital loss on the other end as you know that's a different market bucket from which we make distributions [indiscernible] distributions. We currently have capital losses on our balance sheet as an example. We haven't had a capital gains distribution from [indiscernible] quite some time, so the answer to your question is not really, the ordinary will be ordinary because reports [indiscernible] which in generally speaking has some relationship to the cash flow [indiscernible] and if there is a capital loss on the backend that is a different distribution for us now, which is frankly it creates the oddity that we're being thinking for some time that cash is closer to the tax and were we're required to distributed on that basis and not on the basis of a potential future capital loss if there is one.

So does that create a potential problem with this business model and these assets, given that you have to pay out more than really the open that earnings are, essentially we're going to be losing a little bit of book every quarter and the difference between the GAAP and tax number and really what's paid versus the true long term return to the assets. Is there, how do you think about that dynamic?

Sure Greg, I think a lot of that ultimately comes back to our trading of the portfolio, the extent to which we are recognizing or realizing capital losses versus capital gain or we've able to exit at prices currently close to our purchase prices over time. Certainly looking back historically our IRRs have been very strong and are meaningfully stronger than the GAAP effective yield we're recognizing at the moment. As you know the effective yield calculation requires us to assume that we hold the instrument until maturity, final liquidation etcetera. We have not historically incorporated that as an investing practice, we've traded our CLO equity book, much more actively than that.

But you don't think that, I mean if we just kind of look at over the last two years, book values went from the upper 9's, to now 867 some of that was due to the volatility in the fourth quarter but some of that has been to having been forced to pay out more dividend then the real true return of the CLOs is, you don't see that as a potential continuing problem going forward, enforce to kind of payout the entire dividend?

It's certainly an issue that we are focused on and mindful of with that said I think our primary focus is on generating the best risk adjusted returns we possible can within both of our trading strategies, so investing strategies both on the debt side to corporate debt side and on the CLO equity side where we've historically generated very strong returns.

Got it.

Your point is certainly a valid one.

Great. And then you are finally on the kind of net portfolio appreciation the 8.5 million this quarter any specific investments or just broad movements across the portfolio.

Yes. I think we saw the same thing Greg that you saw and that others saw during the quarter which is that the leverage loan markets to U.S. corporate loan market was particularly strong in the first quarter of 2015.

Our next question is from Greg Nelson with Wells Fargo Securities.

So, just a couple from me, so the increase in distribution today from $0.27 to $0.29 is that reflecting your view of what' you will pay out sustainably now or just some of that include any increase from the $0.04 of reversal from previously recorded incentive fees.

Sure, Greg. The $0.38 includes $0.04 of reversal so the $0.34 minus the $0.04 would be the adjusted number that we would be focusing on we don't as you know make projections with respect to future income or future dividend distributions that I think the board when it considered the establishment of the $0.29 dividend this quarter with looking at all the information available to it including any projections that we have the current quarter and the desire to be compliant with the primary goal of TICC as the BDC which is to generate sustainable cash income on a quarterly basis to the shareholders.

Okay. And then just as you think about the value creation for shareholders I think you did 2.4 million in share repurchases during the quarter out of 50 million authorized program that expires at the end of June average price was about 756 obviously shares have traded down since then when you think about the value creation for shareholders and you see the yield on your debt portfolio declining your stock is trading a [indiscernible] and leverage is already close to one times I just want to think about get idea of your capital priorities?

Sure. I think our principle priority is to generate again the best risk adjusted return possible and certainly the repurchase of shares represents a useful and important component of that calculation. We did by a limited amount of stock back fairly recently and we continue to look at share repurchase opportunities in a variety of ways as a useful method for value creation for shareholders certainly.

At this time I'm showing no further questions. So this concludes our Question-and-Answer Session. I would like to turn the conference back over to Jonathan Cohen for any closing remarks.

Great. Well I'd like to thank everybody, who participated in our first quarter 2015 TICC earnings call. We thank you all for your interest and for your participation and we look forward to speaking to you very soon. Thanks very much.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.