Good morning, and welcome to the PennantPark Floating Rate Capital First Fiscal Quarter 2019 Earnings Conference Call. Today's conference is being recorded. At this time, all participants are placed in a listen-only mode. The call will be open for a question-and-answer session following the speakers’ remarks. [Operator Instructions] It is now my pleasure to turn the call over to Mr. Art Penn, Chairman and Chief Executive Officer of PennantPark Floating Rate Capital. Mr. Penn, you may begin your conference.

Thank you, and good morning, everyone. I'd like to welcome you to PennantPark Floating Rate Capital's first fiscal quarter 2019 earnings conference call. I am joined today by Aviv Efrat, our Chief Financial Officer. Aviv please start off by disclosing some general conference call information and include a discussion about forward-looking statements.

Thank you, Art. I'd like to remind everyone that today's call is being recorded. Please note, that this call is the property of PennantPark Floating Rate Capital and that any unauthorized broadcast of this call in any form is strictly prohibited. Audio replay of the call will be available by using the telephone numbers and PIN provided in our earnings press release as well as on our website. I would also like to call your attention to the customary Safe Harbor disclosure in our press release regarding forward-looking information. Today's conference call may also include forward-looking statements and projections and we ask that you refer to our most recent filings with 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 by law. To obtain copies of our latest SEC filings, please visit our website at www.pennantpark.com or call us at 212-905-1000. At this time, I'd like to turn the call back to our Chairman and Chief Executive Officer Art Penn.

Thanks, Aviv. I'm going to spend a few minutes discussing financial highlights, followed by a discussion of the portfolio, investment activity, the financials, and then open it up for Q&A. For the quarter ended December 31, we invested $180 million in primarily first lien senior secured assets at an average yield of 8.6%. PennantPark Senior Secured Loan Fund or PSSL continued to grow. As of December 31, PSSL owned a $493 million diversified pool of 43 names, with an average yield of 8.2%. Over the last several years, we have substantially grown our platform by adding senior and mid-level investment professionals in regional offices as well as New York. The additional people in offices combined with additional equity and debt capital we have raised has significantly enhanced our deal flow. This puts us in a position to be both active and selective. The growth is evidence of this enhanced platform. Net investment income was $0.28 per share. Core net investment income, excluding accrued not payable incentive fee and one-time credit facility amendment costs, was $0.30 per share. Due to the activity level we are seeing and the growth of PSSL, we are pleased that our current run rate net investment income covers our dividend. Our earnings stream should have a nice tailwind based on gradual increase in our debt-to-equity ratio, while still maintaining a prudent debt profile. As of September 30, our spillover was $0.31 per share. With regard to the Small Business Credit Availability Act, a reminder that our board approved the modified asset coverage that was included in the law, reducing asset coverage from 200% to 150% effective April 5, 2019. Over time, we are targeting a debt-to-equity ratio of 1.4 times to 1.7 times. We will not reach this target overnight. We will continue to carefully invest…

Thank you, Art. For the quarter ended December 31, 2018, net investment income was $0.28 per share. Core net investment income was $0.30 per share, excluding our reversal of $0.04 per share of accrued not payable incentive fee, and excluding $0.06 per share of one-time financing costs, net of investment in incentive fees. Looking at some of the expense categories, management fees totaled about $3 million, excluding $1 million accrued not payable incentive fees. General and administrative expenses totaled about $1.1 million, and interest expense totaled about $5 million, excluding the one-time $4.5 million credit facility financing amendment costs. During the quarter ended December 31 net unrealized depreciation on investment was about $12 million or $0.32 per share. Net realized gain was about $1 million or $0.02 per share. Net unrealized appreciation on our credit facility and notes was $6 million or $0.14 per share. Net investment income covered our dividends. Consequently, NAV went from $13.82 per share to $13.66 per share. Our entire portfolio our credit facility and notes are mark-to-market by our Board of Directors each quarter using the exit price provided by an independent valuation firm, exchanges or independent broker-dealer quotations when active markets are available under ASC 820 and 825. In cases where broker-dealer quotes are inactive we use independent valuation firms to value the investments. Our portfolio is highly diversified with 85 companies across 25 different industries. 91% is invested in first lien senior secured debt including 12% in PSSL, 2% in second lien debt and 7% in equity including 5% in PSSL. Our overall debt portfolio has a weighted average yield of 9.2%. 100% of the portfolio is floating rate. Now, let me turn the call back to Art.

Thanks, Aviv. To conclude we want to reiterate our mission. Our goal is a steady stable and protected dividend stream coupled with the preservation of capital. Everything we do is aligned to that goal. We try to find less risky middle-market companies that have high free cash flow conversion. We capture that free cash flow primarily in first lien senior secured floating rate debt instruments and we pay out those contractual cash flows in the form of dividends to our shareholders. In closing, I'd like to thank our extremely talented team of professionals for their commitment and dedication. Thank you all for your time today and for your investment and confidence in us. That concludes our remarks. At this time, I would like to open up the call to questions.

Yeah. This is Art Penn and I think it looks like we may be having some technical difficulties on the Q&A with the system this morning. We are around at the company. Feel free to call me or our CFO, Aviv Efrat, should you have any questions, following up on this call. My apologies for the technical difficulties. Thank you very much and we'll talk to you next quarter.

And once again that does conclude today's conference. We thank you all for your participation. You may now disconnect.