Good day, ladies and gentlemen, and welcome to the Solar Senior Capital Ltd. conference call for the Quarter and Fiscal Year Ended December 31, 2015. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to the Chairman and Chief Executive Officer, Michael Gross. Please begin.

Thank you, operator and good morning. Welcome to the Solar Senior Capital Ltd.’s earnings call for the quarter and year ended December 31, 2015. I’m joined here today by Bruce Spohler, our Chief Operating Officer; and Richard Peteka, our Chief Financial Officer. Richard, would you please start off by covering the webcast and forward-looking statements?

Of course. Thank you, Michael. I’d like to remind everyone that today’s call and webcast are being recorded. Please note that they are the property of Solar Senior Capital Ltd. and that any unauthorized broadcast, in any form, are strictly prohibited. This conference call is being webcast on our website at www.solarseniorcap.com. Audio replays of this call will be made available later today as disclosed in our press release. I’d 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 events 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. Actual results may differ materially as a result of a number of factors including those from time-to-time in our filings with the SEC. Solar Senior Capital Ltd. 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’d like to turn the call back to our Chairman and Chief Executive Officer, Michael Gross.

Thank you, Rich. 2015 was a very productive year for Solar Senior. We maintained our high selective approach with new investments throughout the year. Including our membership interest in the First Lien Loan Program or FLLP, SUNS had originations of approximately $120 million of loans and prepayments in sales of approximately $104 million during 2015. In the fourth quarter, originations were approximately $14 million with sales and repayments of approximately $40 million. Today, SUNS in a very good position to take advantage of the current favorable investment environment to redeploy our available capital into investments at wider spreads and lower leverage levels in the loan we are exiting. The credit fundamentals and financial performance of our portfolio companies remain very strong. At December 31, 2015, our portfolio was 100% performing and we have zero direct energy exposure. Given the slow growth environment and uncertainties surrounding the direction of interest rates and domestic economy, SUNS portfolio is positioned defensively and right where we want it to be. Approximately 99% of our comprehensive portfolio exposure including FLLP in Gemino is in secured loans, and 99% of company’s portfolio is comprised of floating rate investments. Technical pressure in the liquid leverage credit market rolled over into the middle market in late third quarter and fourth quarter, resulting in a mark-to-market decline in our net asset value to $16.33 per share at December 31, 2015. We view the unrealized depreciation in NAV in the second half of 2015 as temporary and expect to fully recoup the tactical write-downs when these loans get repaid. During 2015, we made significant progress with strategic investments in Gemino Healthcare Finance and FLLP, our joint venture with VOYA Asset Management. Gemino continues to demonstrate strategic value to its healthcare lending expertise, recurring cash income, diversified portfolio of senior secured…

Thank you, Michael. Solar Senior Capital Ltd.’s net asset value at year-end was $188.3 million, or $16.33 per share, as Michael noted earlier. This compares to net asset value of $196.8 million or $17.06 per share at September 30. Our investment portfolio at December 31 had a fair market value of $306.5 million in 45 portfolio companies operating in 23 industries. This compares to a fair market value of $339.6 million in 47 portfolio companies operating in 24 industries at September 30. At December 31, the weighted average yield on our income producing portfolio increased to 7.9% measured at fair value versus 7.2% at September 30. And 100% of our portfolio investments are performing. Gross investment income for the three months ended December 31 reflected a slightly smaller portfolio and totaled $6.1 million versus $6.5 million for the three months ended September 30. Net expenses for the three months ended December 31 were $2.0 million compared to $2.4 million for the three months ended September 30. Accordingly, net investment income for the quarter ended December 31, 2015, was $4.1 million or $0.35 per average share versus $4.1 million or $0.35 per average share for the quarter ended September 30. Below the line, SUNS had realized and unrealized losses for our fourth fiscal quarter at $8.5 million, compared to realized and unrealized losses of $5.6 million for the quarter ended September 30. Ultimately, the company had a decrease in net assets resulting from operations of $4.4 million or $0.39 per average share for the three months ended December 31. This compares to a decrease in net assets resulting from operations of $1.5 million or $0.13 per average share for the three months ended September 30. At this time, I’d like to turn the call over to our Chief Operating Officer, Bruce Spohler.

Thank you, Rich. Let me begin by providing the portfolio update. Overall, the credit fundamentals and financial performance of our portfolio companies remains sound. At year-end, the fair value weighted average leverage through our first lien investments, including our ownership in FLLP, was approximately 3.7 times and the weighted average cash interest coverage of our first lien investments was approximately 3.1 times, consistent with the prior four quarters. At the end of the fourth quarter, the weighted average revenue and EBITDA of first lien investments in SUNS portfolio, including FLLP, was over $370 million of revenues and over $60 million of EBITDA. While the portfolio is broadly diversified across multiple issuers and industries, we continue to favor larger mid-market issuers, operating in more defensive non-cyclical industries. We feel confident about the prospects of our portfolio companies’ operating performance in 2016. In the fourth quarter, the majority of NAV decline of approximately 4% was due to technical mark-to-market write-downs resulting from the sell-off in the liquid loan market and the remainder was predominantly related to our positions in the prison phone companies, Securus and Global Tel*Link, which I will discuss shortly. As Michael mentioned, we expect to fully recoup the mark-to-market adjustments when these loans are repaid. Equally comforting, at year-end, our portfolio was 100% performing and we have no direct energy exposure to the oil and gas or commodity sectors. At year-end, the weighted average yield on our portfolio was 7.9% when measured at fair value. Our internal risk assessment on a weighted average basis remains at 2 times when measured in fair value and based upon our 1-to-4 risk rating scale, with 1 representing the least amount of risk. SUNS’ comprehensive portfolio, which includes loans in FLLP, attributable to SUNS at 87.5% ownership and investments across 47 issuers in…

Thank you, Bruce. In conclusion, we are pleased with our operating results and progress in 2015. SUNS successfully navigated a challenging investment environment during the year and stayed true to our investment discipline. In a period of increased uncertainty and volatile markets, SUNS maintained a high diversified and defensive portfolio that at December 31 was comprised of 99% senior secured loans, has no direct exposure to energy and is 100% performing. Distributions from Gemino and FLLP contributed to net investment growth in 2015. With substantial capital to take advantage of the current favorable investment environment, we believe SUNS is well positioned as a clear path to grow investment income in 2016. This month marks the fifth anniversary of Solar Senior as a public company. Since inception in 2011, our investment priorities and disciplines have remained steadfast. Invest prudently as principles, protect capital, build and maintain a diversified portfolio of predominantly first lien senior secured floating rate loans, which we believe will provide downside protection and generate steady distribution to our shareholders. We’ll continue to be highly selective of our investments, while maintaining our focus on issuers and structures that we believe can protect capital and provide favorable risk-adjusted returns. To be clear, while our fundamentals are strong, we are not at all pleased with the price performance of SUNS. We are frustrated that I’m sure many of our fellow shareholders are that our efforts to drive fundamental performance, earn the dividend and maintain a diversified portfolio of strong credit quality is not positively impacting our stock price. We appreciate the patience of our shareholders, many of whom have been SUNS’ investors since inception. During the year, the senior management and investment team increased its ownership position to approximately 7.1%. In addition, we waived incentive fees in 2015 in order for the GAAP net investment income cover our dividend and are making a similar commitment for 2016. We believe our investment team is tightly aligned with shareholders and we continue to be focused and doing everything we can to build long-term shareholder value. We will be adding to our SUNS’ position as well throughout the year. At last night’s closing price of $13.37 per share, SUNS trade at 0.82 times book value, yielding over 10.5%. We’ve approximately $130 million of available capital to make additional investments. SUNS’ yield of approximately 10.5% compares favorably to the 7.6% weighted average yield on a representative sample of 14 closed end bank loan funds. At current prices, we believe SUNS is a very compelling investment opportunity. Thank you for your time this morning. We look forward to speaking to you again next quarter. Operator, can you please open the line for questions at this time?

[Operator Instructions] And the first question is fro Andy Ellner of JMP Securities.

Given the relatively attractive market conditions and what’s historically seen to be a seasonally more active quarter, we were surprised to see gross originations at one of the lowest levels since inception. Can you give us some color as to what caused the muted origination activity and your expectations for portfolio growth in 2016?

We actually did not see obviously a lot of things that we liked in the fourth quarter. Additionally, some of those were pushed into Q1. As you can imagine, given the volatility they got elevated in the latter part of the fourth quarter, many borrowers decided to try to hold off if they could until Q1 to see if market conditions improved. Obviously, they did not. So you should see an increase in originations in Q1, which is typically a seasonally slow quarter. So it’s a bit of a shift.

And how about for growth in 2016?

We think that we’re extremely well positioned as we head into 2016 with our available capital of $130 million, both on and off balance sheet in our FLLP joint venture. So our goal is to deploy lion’s share of that if this market environment continues.

[Operator instructions] And the next question is from Jonathan Bock of Wells Fargo Securities.

This is [Jamie] dialing in for Jonathan. Was VOYA now a partner in both off balance sheet entities at Solar as well as SUNS? Can you shed a little light on the relationship between these two entities?

Sure. The relationship is very similar. We target the same investment team at VOYA for both opportunity set. I think the one thing I would highlight is that VOYA likes to invest alongside of both of these joint ventures. And I think in this market environment, where pricing has moved, VOYA does not invest on a levered basis. They’re looking at exclusively unlevered returns and returns are moving their way. So their appetite to grow these verticals has increased and they are very attractive to both first lien and stretch first lien asset classes.

But the relationship is very tight and very strong. We’ve now done close to 20 deals across both vehicles and we only expect them to grow.

[Operator instructions] There are no further questions at this time. I’ll turn the call back over to Michael Gross for closing remarks.

Thank you all for your time and patience of investors. We look forward to reporting back to you in two months to report on Q1 about our continued growth. Thank you.