Hello and welcome to the TICC Capital Corp. Second Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jonathan Cohen. Mr. Cohen, please go ahead.

Good morning and welcome everyone to the TICC Capital Corp. second quarter 2015 earnings conference call. I am 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 the 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 would 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 will turn the presentation back over to Jonathan.

Thanks very much, Bruce. For the second quarter of 2015, TICC reported total investment income of approximately $23.8 million, representing an increase of approximately $2 million from the first quarter of 2015. This increase reflects the higher reported earnings associated with our CLO equity class investments. While reportable GAAP earnings on our CLO equity investments were approximately $9.6 million for the quarter using the effective yields methodology whereby we assume that we continue to hold all of our CLO equity positions to their respective redemptions with various assumptions made including the losses over time. We received or we are entitled to receive approximately $17.9 million in distributions for the second quarter of 2015. For the first quarter of 2015, we reported CLO equity distributions of approximately $18.5 million. TICC also reported GAAP net investment income of approximately $10.9 million or $0.18 per share for the second quarter of 2015 compared with the first quarter of 2015, which stood at $0.21 per share. The first quarter figure included a one-time fee reversal of net investment income incentive fee equating to $0.04 per share. Therefore, excluding that reversal, the GAAP figure for the first quarter would have been $0.17 compared to the $0.18 we have just reported for the second quarter. Our estimated distributable net investment income, or EDNII, for the quarter ended June 30, 2015 was approximately $0.32 per share. We note that our EDNII represents that portion of our estimated annual taxable income available for distribution to common shareholders, where we estimate to be attributable to the quarter. The company’s Board of Directors has declared a distribution of $0.29 per share for the third quarter this year stable on September 30, 2015 the stockholders of record as of September 16. For the quarter ended June 30, 2015, TICC reported GAAP…

Thank you. [Operator Instructions] And the first question comes from Mickey Schleien with Ladenburg.

Yes, good morning Jonathan. My first question relates to the motivation for selling the external manager of TICC and more importantly – not more importantly, but for my perspective how does that effect potentially Oxford Lane, is this a shift in strategy or are you exiting the business in general, just your thoughts on state of the market and what motivated this transaction.

Sure, Mickey. Thank you very much for the question. The motivation for this transaction, I think was the realization that competitive advantage within the syndicated and direct corporate loan markets is increasingly becoming a function of scale and platform. And we have worked for several years now with Benefit Street. We have been an investor with Benefit Street. And we have come to understand that they in our view have significant competitive advantage in terms of originating structuring, negotiating private debt transactions. And that more than anything else was the driver for this transaction. In terms of the other businesses that we operate there are no changes contemplated.

Okay, thank you for that, Jonathan. I note on the TICC balance sheet, there is almost a $6 million payable for advisory fees and NII incentive fees does this – if the transaction is consummated does this trigger an actual cash payment to – for that accrual?

No, it should not.

Okay. And my last question to the extent you can talk about it, BSP also has a small non-listed BDC, do you have some sense of how they intend to manage the platform they are taking over from you in relation to the non-listed BDC?

Any additional information that you should be in the proxy which again we hope to have that by the end of the day today.

Thank you. And the next question comes from Greg Mason with KBW.

Great, thanks. Good morning Jonathan and I appreciate you looking at the competitive advantages needed in the marketplace and the transaction, if you are able to – can you just talk a little bit about the process for completing this transaction and what was the process to your partnership with Benefit Street on this, was this widely shopped transaction or just a team that you know and think is the best opportunity for shareholders?

Greg, it was much more of the ladder. This was not a process that we undertook with the notion that this would necessarily have been the result. This was instead a much more organic process that grew out of relationship that we had previously with Benefit Street and the desire to see TICC move into areas and exploit opportunities that it is not able to currently.

And then there was a line in the press release saying that the management fee agreement is going to remain unchanged, is that for just until the deal closes or is that Benefit Street partners kind of long-term view because as we view it you guys did have a very attractive fees structure without the catch up provision, so any thoughts around that?

Sure. As you know, Greg the fee structure cannot be increased in any way including by virtue of adding a ketchup feature which is not something that we contemplate without shareholder approval, so that isn’t anything that we have thought about. Historically, it’s not anything that we are thinking about now. And I appreciate your thoughts about our fees structure. Thank you.

Alright, great. Thanks guys.

Thank you. And the next question comes from Chris York with JMP Securities.

Good morning guys. And thanks for taking my questions. So Jonathan you noted in your prepared remarks of investment strategy at the new entity, we will transition to include focus on privately negotiated investments, can you provide us a bit more color on the tenant focus there, is it going to be in traditional middle market, maybe the lower middle market and then part of the capital stack, senior versus subordinate?

Sure, we should have substantial amount of additional information obviously in the proxy and so I can really only speak to the four corners of the press release this morning. But I think if you were to think about the definition of privately negotiated corporate debt investments, to me those debt transactions where the buyer has a meaningful competitive advantage where by virtue of planning a role in the structuring, in the sourcing origination and ultimately really the architecture of these transactions. That is what meant to have been implied by that phrase.

Got it, that’s it from me, thank you very much.

Thank you.

Thank you. And the next question comes from Jonathan Bock of Wells Fargo Securities.

Good afternoon. And thank you for taking my questions. Very quickly I just wanted to ask a question as it relates to where we sit today, because Jonathan you mentioned that the four corners of the press release do outline a move towards more directly originated deals. And so walk me through how at 0.97 leverage with CLO equity a substantial component of this portfolio and the fact that middle market directly originated loans will carry a much lower yield, walk me through how with an $0.18 or so I guess level of earnings relative to a much higher dividend, how does the dividend not get cut here?

Jon thanks very much for the question. The structure of the portfolio going forward is going to be changed to better confirm with Benefit Street’s view is over time. That said, I think we can think broadly about things like cost of capital which we have historically suffered from. We historically have not had the benefit of low cost capital. My hope is that a larger stronger platform would be able to enjoy the benefits of a lower cost of capital than we do now. The 0.9721 leverage that you referenced is of course our statutory leverage, but it’s not our recourse leverage. We don’t actually owe that level of debt to any counterparty. We consolidate the debt to special purpose vehicles, but we are not liable for those liabilities on a corporate level. So I think there are number of things that could end will likely be done hopefully with the benefit of a broader more diverse and potentially more competitively advantaged platform.

I appreciate that and there is no doubt that Rich Byrne and Benefit Street have a significant degree of capability and will be excellent managers in this space, I guess the question is one would have to assume there is a certain amount of pain when you talk lower cost of capital that’s code in some folks minds that dividend needs to be reduced and generally we do see a major reboot occur as the new manager takes over and so I appreciate you candor the questions, yield, the mass would imply that something will need to be done and that’s fine, we are all purified by fire at some point and we appreciate you answering the questions and look forward to running to you again? Thank you.

Thank you very much Jon.

Thank you. And we have a follow up question from Greg Mason with KBW.

Great. Thanks Jonathan. Just some love to get your idea conceptually about CLO equity, we have talked about this in the past, but as you look at managing Oxford Lane with the pure CLO equity focus in the BDCs, a lot of the BDCs including TICC, with CLO equity haven’t been doing that well at least from a market valuation standpoint, love to get kind of your thoughts on the CLO equity inside the BDC model and what you think about that?

It’s a great question, Greg. I think that we are experiencing a very interesting feedback right now in terms of the dynamic of CLO equity housed within the BDC structure. The market I think has essentially spoken. And the voices said that this is not a desirable asset quest for BDCs. So if we look at the number of BDCs that hold meaningful amounts of CLO equity, they as you said created substantial discounts to book value substantial discounts to their peer groups while the two publicly traded CLO investment vehicles non-BDC regs [ph] each traded premiums to their respective book values. So on the one level – at one level I think it is a perception issue largely for a market sentiment issue. On the other hand there is a very strong feedback that we and others experienced whereby it is more difficult for us to raise capital. It is more expensive for us to raise capital by virtue of our CLO equity exposure. So all of these things are things that we have considered and thought about and I think taken into account or try to take into account as we have looked at this transaction.

Great, I appreciate those comments. Thanks guys.

Thanks Greg.

Alright. If there are no further questions, we would like to thank everybody for their participation and their interest in TICC Capital Corp., we look forward to speaking to you all again very soon. Thank you very much for your time and your interest.