Good day and thank you for standing-by. Welcome to the Q1 2021 SLR Investment Corporation Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Chairman and Co-CEO, Michael Gross. Please go ahead, sir.

Thank you very much and good morning. Welcome to SLR Investment Corp.’s earnings call for the first quarter ended March 31, 2021. I’m joined today by Bruce Spohler, our Co-Chief Executive Officer and Richard Peteka, our Chief Financial Officer. Rich, before we begin, would you please start by covering the webcast and forward-looking statements?

Of course. Thank you, Michael. I would like to remind everyone that today’s call and webcast are being recorded. Please note that they are the property of SLR Investment Corp. and that any unauthorized broadcast in any form are strictly prohibited. This conference call is being webcast from the Investors tab on our website at www.slrinvestmentcorp.com. Audio replays of this call will be made available later today, as disclosed in our earnings press release. I would also like to call your attention to the customary disclosures in our press release regarding forward-looking information. Statements made in today’s conference call and webcast may constitute forward-looking statements, which relate to future event or our future performance or financial condition. These statements are not guarantees of our future performance, financial condition or results and involve a number of risks and uncertainties, including impacts from COVID-19. Past performance is not indicative of future results. Actual results may differ materially as a result of a number of factors, including those described from time to time in our filings with the SEC. SLR Investment Corp. undertakes no duty to update any forward-looking statements unless required to do so by law. To obtain copies of our latest SEC filings, please visit our website or call us at (212) 993-1670. At this time, I would like to return the call back to our Chairman and Co-CEO, Michael Gross.

Thank you, Rich. Good morning and thank you for joining us. The SLR team hopes to find you, your family, friends and colleagues happy, healthy, and safe. I want to start off by discussing our Q1 2021 results before turning the call back over to our CFO, Rich Peteka to discuss the financial highlights and then our Co-CEO, Bruce Spohler, who will walk you through the investment landscape. Yesterday after the close, we reported net investment income of $0.37 per share for the first quarter. This represents a solid increase of the $0.35 we reported in Q4 of 2020. And importantly, we are now through the incentive fee catch-up, which means that each incremental dollar of income is highly accretive to shareholders. Alongside the increase in NII SLRC’s portfolio remains 100% performing as it has throughout the entire pandemic. Net asset value increased $0.10 per share compared to the prior quarter. We attribute the resiliency of our portfolio to our conserve underwriting, our focus on first lien senior secured loans to larger upper middle market companies in our cash flow segment and especially finance investment verticals, which offered greater structural protections and yields than what is currently available in the cash flow lending market. At March 31, over 99% of our comprehensive investment portfolio was invested in senior secured loans and 83% of the portfolio is fair value was allocated to specialty finance investments. During the first quarter, the U.S. middle market reflected a more favorable economic backdrop punctuated by a resurgence in sponsor led M&A and refinancing transactions. The government’s fiscal and monetary stimulus programs combined with the vaccination program have turbocharged recovery and removed a number of uncertainties. As a result, we are seeing increased deal flow across all of our investment verticals. The cash flow transactions we’re…

Thank you, Michael. SLR Investment Corp.’s net asset value at March 31, 2021 was $856.2 million or $20.26 per share compared $852.0 million or $20.16 per share at December 31, 2020. At March 31, 2021, SLRC’s on balance sheet investment portfolio had a fair market value of $1.5, 7 billion in 105 portfolio companies across 20 industries compared to a fair market value of 1.57 billion in 105 portfolio companies across 25 industries compared to a fair market value of $1.53 billion in 105 portfolio companies across 25 industries at December 31, 2020. At March 31, the company had $711.0 million of debt outstanding and leverages 0.82x net debt to equity. When considering available capacity from the company’s credit facilities combined with the available capital from the non-recourse credit facilities at SLR Credit Solutions, Equipment Financing Kingsbridge SLR Investment Corp. had approximately $683 million to fund future portfolio growth subject to borrowing base limits. Moving to the P&L. For the three months ended March 31, 2021 gross investment income totaled $35.9 million versus $31.4 million for the three months ended December 31. Expenses totaled $20.4 million for the three months ended March 31, 2021 and this compared to $16.5 million for the three months ended December 31, 2020. Accordingly, the company’s net investment income for the three months ended March 31, 2021 totaled $15.5 million or $0.37 per average share compared to $14.9 million or $0.35 per average share for the three months ended December 31, 2020. Below the line, the company had net realized and unrealized gains for the first fiscal quarter totaling $6.0 million versus net realized and unrealized gains of $3.4 million for the fourth quarter of 2020. Ultimately, the company had a net increase in net assets resulting from operations of $21.5 million or $0.51 per average share for the three months ended March 31, 2021. This compares to a net increase of $18.3 million or $0.43 per average share for the three months ended December 31, 2020. Finally, our Board of Directors recently declared a Q2 2021 distribution of $0.41 per share payable on July 2, 2021 to shareholders of record on June 23, 2021. With that I’ll turn the call over to our Co-CEO, Bruce Spohler.

Thank you, Rich. First and foremost, SLRC’s portfolio is 100% performing at quarter end. Our performance supports the underwriting thesis of investing at the top of the capital structure in first lien cash flow loans to upper mid market borrowers that operate non-cyclical industries, as well as allocating a significant portion of our exposure to collateralize loans through our specialty finance verticals. At quarter end, the weighted average investment risk rating of our portfolio was under 2 based on our 1 to 4 risk rating scale, with 1 representing the least amount of risk. The percentage of our portfolio rated 3s and 4s is down to 2.8% after peaking at 7.5% in the second quarter of last year. At March 31, SLRC’s comprehensive portfolio was just over $2 billion and was highly diversified encompassing over 600 distinct issuers across 80 industries. Our largest industry exposures are healthcare providers and services, diversified financials, life sciences and retail asset based loans. The average investment per issuer was just over $3 million or 0.2% of the portfolio. At quarter end over 99% of our portfolio consisted of senior secured loans. Of these loans 94.4% were first lien loans and only 4.9% were second lien. Of the second lien loans 2.1% were cash flow and 2.8% were asset-based loans. At quarter end, our weighted average asset level yield was 9.8% compared to 10% the prior quarter. By focusing on our commercial finance verticals, we have been able to maintain asset level yields close to 10%, despite a decrease in LIBOR as well as spread compression. Notably we’ve been able to maintain these yields, while actively reducing our exposure to second lien investments. Total portfolio originations for the first quarter were $215 million and repayments were $230 million, resulting in a net total portfolio of…

Thank you, Bruce. In closing, we believe that the first quarter of 2021 was a great start to the year in terms of our portfolio’s credit quality, earnings growth, and the opportunity set across all of our investment verticals. With the economic recovery in full swing, and SLRC’s portfolio on solid footing, we fully focused on deploying capital in attractive investment opportunities across all of our investment verticals. The breadth of investment strategies, which span cash flow, ABL, life science venture, in addition to equipment financing and leasing remain at modest activity in each vertical aggregates to meaningful overall portfolio growth. As I mentioned earlier, now that we’re through the incentive fee catch-up every incremental dollar of income is highly accretive to shareholder returns at 0.8 times net debt-to-equity. SLRC remains under levered relative to our target of 0.9 to 1.25 times. We have access to ample low cost capital which to fund portfolio growth. As we continue to grow the portfolio, we believe NII will return to fully covering the dividend. We also believe we’re still in the early innings with substantial runway, as financial sponsors deploy record amounts of dry powder and more of the larger businesses we prefer to lend, to choose direct financing over syndicated debt markets. These industry tailwinds combines the scale of SLRC investment advisor should benefit SLRC investors with greater access to upper middle market investment opportunities, which as last year’s proven our better position to protect capital than smaller companies are. In conclusion, our team is confident in SLRC see defensively positioned portfolio, strong liquidity position, and the investment opportunity set. Later on this morning at 11:00, we’ll be hosting an earnings call for Q1 results of SLR Senior Investment Corp. or SUNS. Our ability to provide traditional middle-market senior secured financing through this vehicle continues to enhance our origination teams’ ability to meet our clients’ capital needs. And we continue to see benefits of its value proposition and SLRC’s deal flow. We thank you for your time this morning. Operator, could you please open the line for questions?

[Operator Instructions] Your first question comes from Matt Tjaden from Raymond James.

Good morning and appreciate taking the time. First kind of two technical questions to start off, First on, SOAG [ph], so a good bump up in dividend income quarter-over-quarter, any color you can give surrounding that asset and kind of how we should expect dividend income to settle over the coming quarters.

Yes. Great question. So that’s the gift that keeps on giving. We’ve been invested there for several years. Just to refresh your memory portfolio of long lease aircraft. It is winding down. We don’t expect much more from that. We have, as I mentioned, been in it for a number of years and it’s been an incredibly attractive investment of return in the upper teens on an IRR basis. So a little bit more coming, but we don’t expect the same runway that we have in the past because we haven’t been investing in that vertical for a couple of years now. So it’s a bit of a runoff.

Okay. That’s helpful, I guess, as a follow-up to that, on the other income lines. So obviously, a little elevated, I think you said related to a success fee on a life science loan, when that line item kind of normalizes out. Any commentary you can give on where we would expect that to settle out?

So unfortunately, no, I guess the best way to look at that line is on average over a year’s time period. It’s generated because of life science to your point, that’s the nature of those assets. That was really depressed last year that line just because there was not much assurance. So the good news is we have longer duration than is typical in life science assets, which tend to churn within two years that is accelerating. So we expect that, it’s episodically recurring. It’s not consistently recurring. But we do expect to see more of that. But it’s hard to pick a number on a quarterly basis. It’s really more over the course of a year as you look at it in the context of that portfolio and the life science portfolio has been growing over the last couple of years.

Fair enough. And then just last one for me, kind of more high level. Based on kind of what I’d calculate there’s about $0.40 and embedded NAV per share upside based on your current book, fair value to cost. Again kind of on a high level basis, is the COVID recovery over in fair value to cost marks? Or is there still some potential for NAV per share upside?

Yes. We do think there’s some. I think a fair bit of it came back rather quickly for us just because of the resilient sectors that we’ve been invested in, together with the specialty finance verticals that have also demonstrated a fair bit of COVID resilience. So yes, there is a little bit more to go but we snapped back rather quickly.

Got it. That’s it for me. Appreciate the time.

Thanks for your questions, Matt.

[Operator Instructions] There are no further questions at this time. Presenters, please continue.

Thank you very much for your time this morning. And for those of you are involved with SLR Senior Investment Corp., we’ll talk to you half an hour.

This concludes today’s conference call. Thank you everyone for participating. You may now disconnect.