Earnings Transcript for XFLT - Q1 Fiscal Year 2024

Kimberly Flynn: Welcome to the XFLT quarterly webinar. Thank you so much for joining us today. It's wonderful to be back with you. We're going to hit the highlights very quickly and get to the main event. Lauren Law from Octagon has joined us. She is a Senior Portfolio Manager and will talk about the performance highlights for XFLT for the quarter. My name is Kimberly Flynn, my colleague, Steven Perry from XA Investments are here to address your question.

So remember, there's a Q&A bar at the bottom of the webinar. We'll take your questions today, we'll respond to them either directly or we'll take them live. And if you have any questions after the webinar, please don't hesitate to reach out to us at XA Investments. :

It's, once again, another strong quarter of performance in terms of NAV and price performance. We do have a few general disclosures. We are going to talk about sort of market-driven events. We are going to talk about past performance. And past performance, obviously, does not guarantee future results. And current performance may be higher or lower than any of the performance data quoted in the presentation today. :

There will also be some discussion of forward-looking market outlook information. Forward-looking statements are speculative in nature. And some of the assumptions can change, may or may not materialize over time. So want you just to be aware of some of those items. :

Let's talk now about sort of some of the highlights for the quarter. In terms of recent developments, it's been an action-packed 2024 for the fund. Gretchen Lam, who previously served as a Portfolio Manager for XFLT, was promoted and became CEO of Octagon. :

And we're really pleased to have Lauren Law. This is the second webinar -- quarterly webinar that she's joined us. And Lauren has long worked side-by-side with Gretchen in portfolio management capacity. And the transition has been very seamless between Lauren and Gretchen. :

We also did report to shareholders that a proxy vote was successful, approving an amendment to the fund's declaration of Trust. The fund is now a perpetual fund. And also, there was -- Octagon's parent company was acquired, so we needed to have shareholders vote on that matter. And the -- as a result of the proxy vote, the name of the fund was tweaked. :

The word term was removed. And now, the name of the fund is the XAI Octagon Floating Rate & Alternative Income Trust, so very similar to the previous name. Obviously, the ticker symbol remains unchanged, the strategy remains unchanged, and Octagon remains unchanged in terms of who's running the fund. :

We have had a lot of success in growing the fund and creating additional scale economies. The fund did hit [ $600 million ] in total managed assets in February of this year. And as of most recently in May, we're -- the fund now sits at $678 million in total managed assets. :

As we've grown the common share base through accretive at-the-market share issuances, we've also been refining the funds leverage and the different types of leverage. We're going to get into that in today's presentation, just to help you understand how we manage the assets and the liabilities of the fund to drive performance for shareholders. :

And so I think with that, why don't we move on to questions and topics for our speakers for Steven Perry and for Lauren Law? We're going to start with a discussion of the financial highlights for the quarter. So Steven, if you would, take it away. :

Steven Perry: Yes. Will do. Thanks for joining us. Glad to be back here again. So this is just a financial highlights slide to touch on some of the net investment income and distributions for the fund.

As you'll note, for the 6 months ended March 31, net investment income was [ $0.52 ] per share. Compare that against the backdrop of the 4 to 6 distributions that were declared in the last 6 months, that was [ $0.51 ]. :

There's also been net realized and unrealized gains on investments of $0.26, bringing the total income from investment operations to $0.78 per share. For the 6 months ended on March 31, the ratio of net investment income to average net assets, as you see, was [ 15.4% ]. :

Moving down, we also see in the first quarter that the at-the-market program issued net proceeds of about $19 million. All those common shares were issued at above net asset value. :

And then a little bit of a different take, bringing it further back. $678 million is where total managed assets stood as of Friday. And bringing it further back to September, where it was at $511 million, to simplify that, that's $167 million in new assets brought into the fund over about 8- to 9-month period. And those assets were all brought in on an accretive basis. So we're very proud and happy with that, and we believe that our shareholders also really like that. :

Lastly, weighted average current yields on price for CLO equity, almost 23%. CLO debt nearly 12.5%, loans are at [ 9.75% ] and bonds at 6.67%. So those are some of the financial highlights. I'll jump into some of the typical overview slides that we also go over on a quarterly basis. :

Just to knock out some of the highlights. As of quarter end, the trust was at 38% leverage. Market price was [ $7.09 ], and net asset value was [ $6.97 ] -- I'm sorry, [ $6.94 ]. That leads to a distribution rate of about 14.7% on NAV and 14.39% on market price. You'll also note 537 total holdings, we're seeing that increase pretty consistently as the fund is bringing in more common shares and net proceeds. :

You'll also note, as typical, the top 10 holdings, all CLO equity positions, those are typically much larger positions in individual loans, chunkier. And that makes up about 34% of the portfolio against the backdrop of 43% on first secured loans. :

Here is the portfolio composition over time. As you'll note in the CLO equity and CLO debt lines, there's been a slight uptick in the percentage of CLO equity and a slight downtick in the percentage of CLO debt. We'll hear Lauren talk about some of the opportunities that Octagon is seeing in the marketplace today. :

Moving over to net returns, very, very positive returns across the board. Almost every category is beating the benchmark of quarterly 1-year, 5-year and inception-to-date basis. You'll note the 3-year, it is much closer to the benchmark. And 3 years ago, we were still kind of in that COVID on certain time and period of May 2021, even though that was a year after COVID started. So very, very pleased with the performance of the Trust. :

Here's our premium discount history. The fund is trading tight to its historical average premium. On Friday, it ended at a 1.73% premium. :

Here, we're just showing the backdrop against the S&P 500 broader equity markets just to help give a perspective of what the fund is doing. :

And then the last slide I want to touch on, and this is one we view as health of the fund in the secondary market, offering shareholders liquidity; we're seeing an increase pretty consistently in volume over time. That's against the backdrop of the issuance of more common shares, but it allows shareholders to enter into the fund and exit out of the fund very easily. :

So Kim, on that, that's a pretty quick overview of how the fund is doing right now, and I'll turn it back to you. :

Kimberly Flynn: Okay. Thanks, Steven. Now I'd like to move to more of a fund management topic. Can we talk about some of the fund board governance changes over the last year?

Steven Perry: Yes absolutely. So we'd like to highlight how active the Board of Trustees is in governing the fund. You'll see in the bottom left, there have been 10 Board meetings in the last 12 months. And that's a high number, but not an abnormal number for XFLT.

There's been 4 typical quarterly Board meetings and then a number of special and annual meetings for some of the things we talked about, the proxy solicitation to bring the trust perpetual, the change in ownership of Octagon's parent company. :

You'll also note that, that change of ownership occurred -- had closed in April of 2024. It seems like everyone is very pleased with the transaction, and Octagon's operating business as usual. :

Other things to note, recent transaction overview, the at-the-market program issued that $19 million in net proceeds to the Trust. And then there have been also a few other opportunities the Trust has pursued in the form of convertible preferred shares and registered direct offerings.:

It's important to note that these are [ viewed ] by management and -- as accretive and bringing value to current shareholders. The registered direct closed on February 1 at a level of 2.15% premium to net asset value. And then the convertible preferred shares have been converting over time as designed into common shares, helping grow the common asset base and realize those efficiencies for the fund. :

So the Board is very involved in those. Management and product management committee is very involved in ongoing discussions on beneficial ways to grow the Trust and manage the Trust for shareholders. :

Kimberly Flynn: Great. And Steven, we did add 1 new trustee to the Board in January, Bill Myers. Bill Myers joined us after retiring from a leadership role at Nuveen Investments. He has very deep experience in listed closed-end funds and expertise in capital markets and leverage. So it's been terrific to have Bill joined the Board. And frankly, this Board is very active. So it's helpful to have an additional trustee.

Steven, you talked about some of the recent transactions in terms of highlighting how active the Board has been. But can you dig into the growth of the common share base and what that means for shareholders, how do shareholders benefit from the funds increased size and scale? :

Steven Perry: Yes, absolutely. So the fund has grown via the registered direct offering of common shares, the conversion of preferred shares in that at-the-market program. So those shares are sold out into the secondary market or to -- or placed with institutional investors at a dollar value above that net asset value.

So any time that happens, there is an incremental accretive benefit to current shareholders. bringing money into the fund at a higher rate than you're bringing money in at $1.01, $1.02 for $1 of assets, and it's able to be put to work in accretive ways in opportunistic -- I won't say opportunistic, but into opportunities that Octagon really likes to help build par, to help maintain distribution rates. :

And then on the other side, as you bring in more net assets, that spreads the fixed cost of the fund out across more shares. And so that reduces that fixed expense burden that investors will bear in terms of other expenses. :

There are variable expenses that may increase as -- may grow as the fund size grows as well, but that's very typical in the market. So we're very happy with some of the transactions that the Trust has been able to issue. We're very pleased with the nuanced convertible preferred shares that we have.:

I don't believe at this time there are any other listed closed-end funds in the marketplace that have that kind of structure. It obviously exists across other markets. But as you see on the chart on the screen, there's been a very big uptick in growth and pretty consistent over the last 6 months. So we're -- again, I can't reiterate how happy we are with that and the benefit to shareholders. :

Kimberly Flynn: Well, good. Let's talk about another important topic for shareholders, which is current distributions. So let's talk about XFLT's current distribution rate and the percentage of the distribution that was comprised of income versus return of capital.

Steven Perry: Yes. So at XA Investments, we strive to have a policy that pays out net investment income and from a GAAP basis and limit return of capital. With some -- with asset classes like CLO equity, sometimes it can be challenging to hit that on the head and get it perfect. But over the last 6 months and inclusive of the fiscal year-end 2023, which was September 30, 2023, the fund has been paying out 100% net investment income.

From a tax basis, there is tax return of capital that is [ separate ] from a GAAP net investment income. So if you see a [ $10.99 ] and there's a return of capital on it, that's different than a GAAP return of capital. :

The fund has been able to earn its distribution at this rate or at this time to close to 14%, 15%. We paid $0.085 out since May 2023, so it's [ 12-level ] distributions at this time. We'll hear Lauren talk about how the Trust is managing to earn that distribution in various ways and the tools that, that portfolio management has a little later on. :

Kimberly Flynn: Great. Steven, let's talk a little bit about leverage. I know XFLT has various types of leverage. So how would any potential rate -- interest rate cuts impact XFLT's cost of leverage?

Steven Perry: Yes, good question. So there are two forms of leverage

That cost of leverage has been increasing as rates have been increasing over time. And so that is one that can be toggled on a daily basis, weekly basis. And we find it very beneficial to the Trust. :

The second form is the preferred leverage, and that's fixed-rate leverage. As you see, there are 3 different rates: The retail preferred, which you can go out in the secondary market and buy at 6.5%; and then the convertible preferreds have a base rate -- or have the rate of 6% and 6.95%. As of quarter end, that was the leverage mix.

If we move forward to last Friday and some subsequent events, the 6.0 preferreds are no longer outstanding and have been converted to common shares. So right now, if you're looking at the screen, you have the top 3 different types of leverage outstanding. And on the -- yes, I think that's -- I think those are the highlights, Kim. I don't know if there's anything else you'd like to add on that. But... :

Kimberly Flynn: I would just say that's consistent with our expectations and the plan for the convertible preferreds because it's a temporary form of leverage, which is why we have the retail preferreds and which is why we have the bank borrowings. And so I think, Steven, you and the team do a good job managing this mix.

We have been in a higher interest rate environment. And so obviously, the most recent round of convertible preferreds were issued at 6.95%. But relative to -- if you follow the [ BDC ] market or if you follow some of the other competitor funds, preferreds have been pricing in the 7s or even the low 8s in terms of cost of leverage. So XFLT continues to have an advantage in terms of its leverage mix and overall cost of leverage, which is quite attractive. :

And to the extent we do see rates decline, the nice thing about XFLT is the assets and the liabilities are both floating. And that relationship is really important, which is why XFLT lends itself to the use of leverage because when -- it's that -- it's the complementary nature of the fund's assets and the liabilities, and that's why we strive so hard to manage it the way we do. :

Well, Steven, that was terrific. So if there's questions from the audience, please remember to type them in. We'll try to address those as we go. I'd like to pivot now and talk about the performance of the loan in CLO markets. Lauren, take it away. :

Lauren Law: Sure. We've certainly been off to a very strong start, really in both markets in 2024. Loans returned just under 2.5% in the first quarter, continuing the robust trend of performance that the market experienced over the course of 2023.

Of note, the lower-rated portion of the loan risk spectrum outperformed in the first quarter, with the CCC portion of the index returning in excess of 5% and BBs returning just 2%. This was really driven by the higher-yielding CCC assets as well as a small amount of price improvement in that portion of the index. :

It is worth noting that this robust performance of the loan market has continued into the second quarter, with the market posting gains again in both April and May.:

In a similar fashion, the CLO tranche market also off to a very strong start in 2024. The AAA portion of the index was up about 1.85% in the first quarter, and the BB portion was up in excess of 6%, with the returns on the rest of the capital stack sitting somewhere in the middle of these 2 goal posts. :

Both markets are experiencing fairly significant increases in demand as the market has shifted to a higher-for-longer outlook, which we have believed in for some time, but this is really leading investors to seek more exposure to floating rate assets. This strong demand has led to pretty significant spread tightening across both markets. :

Kimberly Flynn: Lauren, in terms of spread tightening, as a main driver of return in both CLO tranches and leveraged loan markets, can you expand a little bit on what you're seeing there?

Lauren Law: Sure. Spread tightening has been a prevalent theme in both markets, and that's across all CLO tranches, from the AAA tranche to the BB tranche. But just to take the CLO AAA tranche as an example, the market entered 2024 with primary new issue CLO AAAs pricing in the SOFR plus 175 range for the highest-quality managers.

Fast forward to today, and the primary market has started to price AAAs in the SOFR plus 140 to 145 context. And this level of spread tightening is significant and has a number of implications for the market. :

One, it is one of the drivers of robust returns across the tranche market because as spreads decrease, [ prices ] increase. The base rate is also helping here because the product has a very attractive yield. But two, and I think more interesting, it means that the weighted average cost of debt of new-issue CLOs is significantly cheaper in 2024 than it was in 2023 and really the better part of 2022. And this has led to very strong new-issue CLO creation. :

Said differently, primary CLO equity has been more attractive this year. And thus, we have seen more activity, more CLO creation, more activity from third-party CLO equity buyers. It's been a very healthy market. :

And as you turn to the loan market, and this is not unrelated to what is happening in the CLO market, we're also experiencing CLO -- excuse me, spread tightening here as well. Robust CLO creation, as I just described, also means robust demand for loans. And with little true new-issue loan supply, we've seen loan prices move up, loan spreads contract and very robust refinancing activity. :

Today, a significant portion of the loan market trades above par. And when loans trade above par, borrowers often opt to refinance to lower their cost of borrowing. We are feeling the impact of this activity across the Trust loan holdings as well as our CLO equity positions. :

Kimberly Flynn: Lauren, you mentioned a few headwinds. So how does XFLT mitigate the impact on net interest income?

Lauren Law: Yes, it's a really good question, and it brings you to another dynamic that is prevalent in the market right now because it does serve to mitigate the headwind of tighter loan spreads on the Trust's underlying pool of assets. I touched on the impact of cheaper CLO financing costs on new CLO formation earlier.

It's also important to highlight that tighter CLO financing costs or tighter debt spreads on CLO tranches have also led to an increase in reset and refinancing activity within the CLO tranche markets. Resets and refis can be very, very accretive. And we have seen a significant amount of this activity so far this year.:

As a reminder, a reset is the total refinancing of a CLO's debt tranches and the contractual extension of its reinvestment period by the equity. The debt tranches are generally refinanced at a cheaper rate. And the longer reinvestment period results in a more attractive equity security for the Trust. :

The Trust has already reset a number of its equity investments so far this year, and we would expect more of this activity to occur really throughout the rest of 2024. Resets and refinancings, this type of activity will serve to mitigate the impact of spread tightening in the loan market. :

Kimberly Flynn: Lauren, we've seen continued economic growth and strong employment figures, so recession fears seem to be less prevalent now. Has there been a broader sort of risk on mood in the high yield and loan markets?

Lauren Law: Yes. I would say the supportive economic backdrop has contributed to the strong fundamental performance of leveraged loan borrowers. So across our portfolio of loan issuers, we continue to see low mid-single-digit revenue growth and mid high single-digit EBITDA growth on average.

And -- but despite this robust performance, the market does remain somewhat bifurcated, with performing loans trading at, around or even over par, as I mentioned earlier, and CCC and stress loans still remaining to trade at significant discounts. :

Loans that underperform expectations and -- are either CCC or at risk of downgrade to CCC, trade meaningfully cheap to the rest of the market and at times, can be subject to severe price corrections in the event of either earnings surprises or other unexpected events in the market. :

So no, I would not necessarily characterize the loan market as risk on as I think investors remain discerning when it comes to credit risk. And I think that's, I think, important to note in the market today. :

Kimberly Flynn: So with that, could you take a little bit closer look at the performance now, looking at the leverage loan, the CLO markets over the last 6 months? And then maybe talk a little bit about the financial performance of borrowers in Q1.

Lauren Law: Sure. In Q1, as I mentioned, we've seen a continuation of the earnings trends that really we saw in the back half of 2023, and that's healthy revenue growth, low mid-single digits in the first quarter and then EBITDA growth in excess of that revenue growth, call it mid- to mid-high single-digit EBITDA growth.

We have seen continued margin expansion across leveraged borrowers. So on average and on the whole, the market is in a very healthy place. That doesn't mean that there aren't some sectors and some credits that are under pressure, given the increase in base rates and what that has meant for interest coverage and cash flow of some of the highly levered borrowers. So we do continue to see some pockets of stress, some stress in the loan market.:

It's a very low percentage of the loan market today, but it exists. And we continue to see downgrades to CCC. So some headwinds, though fundamentals on the whole and on average remain somewhat supportive. :

Kimberly Flynn: Okay. Could we talk a little bit about specific industries or sectors? So which part of the loan market is currently outperforming and which is sort of underperforming at present?

Lauren Law: Sure. I'll start with underperforming first because get it out of the way. As I said, loans are performing well on average with few exceptions, but there are a couple of sectors that are under pressure, a few that I would highlight, namely the media, cable and telecom sectors.

Leverage borrowers within the cable and telecom space are contending with various headwinds, including increased competition, a weak environment for new customer additions and really the need to spend significant CapEx dollars to compete, at the same time, contending with sizable interest burdens, given the levered nature of their balance sheet. We have seen a fair bit of stress in these 2 sectors and would expect it to continue. :

Credits within the media sector have also been under pressure as TV networks lose viewers and advertising spend has been relatively weak, particularly for this medium. On the positive side, though, we do continue to see strong performance from many consumer-facing sectors such as gaming, certain consumer goods sectors and borrowers that cater to consumer experiences. :

So on the whole, more outperforming sectors than underperforming sectors, though there still are pockets of risk within the loan market. :

Kimberly Flynn: Okay. So in terms of your expectations for loan defaults, how are you thinking about sort of your forward-looking view on defaults?

Lauren Law: Yes. I think defaults are expected to remain at elevated levels, elevated yet manageable levels. We have been saying really for the last year to 2 years that we expect defaults to remain at or around the long-term average. They have ticked down to start 2024, but we continue to see candidates for default within the loan market and price volatility within certain borrowers that would portend more stress coming our way.

I don't think that the level of default will be meaningful to derail the performance of the Trust, but it is certainly something that we are mindful of and managing to. :

Kimberly Flynn: Okay. Let's talk a little bit about CLO issuance, primary issuance and CLO arbitrage most recently. Where in the CLO capital structure are you all seeing the most opportunity now?

Lauren Law: Yes. So from an issuance perspective, we do expect new CLO issuance to continue at an elevated rate. So far this year, the U.S. broadly syndicated CLO market has issued in excess of $70 billion of new-issue CLOs and completed over a -- almost $72 billion of resets and refinancings.

Given the tightening of CLO debt print, we would expect this level of activity to continue as primary equity buyers look to capitalize on the attractive financing costs available in the market. :

In addition, we expect refinancing and reset activity to continue at a very fast pace, given how accretive this activity is for existing CLO equity holdings. And as I mentioned earlier, we certainly expect the Trust to benefit from this type of activity. :

In terms of where we see value, we do continue to like given BBs given the attractive carry. But more so this year versus last year, have found more interesting opportunities to participate in both primary and secondary equity. And you'll see that -- in the shift in allocation within the Trust. :

And I think Steven actually highlighted this earlier. We do like equity more relative to BBs this year. We have been looking to put dollars to work in both the primary and second markets. The primary market offers longer reinvestment periods, very tight liability costs. And we think it is helpful for the Trust to gain exposure there. :

And the secondary, we have seen some interesting opportunities to put dollars to work in transactions that we would hope to reset or refinance at a later date, either this year or early next year, creating an attractive total return opportunity for the Trust. :

Kimberly Flynn: Great. Lauren, I do have a couple of questions that have come in. I just want to remind audience members that they can use the Q&A bar at the bottom to type a question. We're happy to address your questions now. Or you can contact us and we can speak further.

First question is actually for Steven. This is a question about how does XFLT sort of compare to the CLO debt ETFs that are in the marketplace, specifically I think the largest is a [ Janus ] AAA CLO debt. So maybe if you -- I know CLO debt is a small part of XFLT, but if you could just talk about some of the differences between XFLT and that category of CLO debt ETFs? :

Steven Perry: Yes, absolutely. I think when looking at the -- let me find a good slide here to throw up, we'll throw up the portfolio -- or top 10 holdings slide. So when you think about the CLO debt ETF, it's a pretty efficient vehicle for CLO debt. I think the bid-ask spread is probably going to be a little bit wider as they're a little bit beholden to buying and selling on a regular basis.

Talking about XFLT specifically compared to those funds, those [ deal ] of debt-focused ETFs are going to have a much higher AAA, AA, A exposure. And those are tranches we don't typically see in XFLT. XFLT is going down the capital stack, looking at some BBBs and BBs and then CLO equity. In those CLO debt ETFs, you're not going to find the level of CLO equity that you would find in XFLT. And you also won't find a similar mix of loans and CLOs. :

And so depending on liquidity goals, risk tolerance goals, there could be great opportunity in those ETFs. But XFLT is kind of a unique fund of its own with that 50-50 exposure of CLO debt and equity of 50% and loans that are roughly 50% clip. :

Kimberly Flynn: Yes. I think you're right, Steven. It's interesting that we're getting more questions now as CLOs become sort of better understood. And frankly, it's good that advisers and investors are asking questions about the differences between these different types of products and what the distribution rates and what the return expectations will be. But I think you're right, XFLT does remain unique in the marketplace in terms of the risk-adjusted return profile and the asset mix.

Okay. The next question -- this is a question, Lauren, for you. The question is that it looks like high tech is the largest segment in terms of the industry breakdown. And so how is Octagon thinking about the impact of AI? Is some of it sort of too soon? What is Octagon discussing about the impact of AI on some of the tech holdings in the portfolio? :

Lauren Law: Sure. Just to dissect that a little bit further, I would highlight that a lot of our tech holdings tend to be software as opposed to hardware, where we see recurring revenue base and high growth. So that's where we have really focused our exposure in the Trust. Outside of that, in terms of the impact of AI, it is certainly something that we are focused on, I imagine any investor definitely is at this point in time.

I think it is too soon to know all of the implications. One of the things that we've been focused on with our tech exposure is the ability for AI to generate some efficiencies in terms of coding and other development expenses that can be -- can really leverage this technology. :

So I think at this point in time, we're viewing it as both an opportunity and a risk for some of our exposure, and it's really a case-by-case basis as to whether we think a business can be disintermediated by the new tech. But it is certainly something that we are very focused on. :

Kimberly Flynn: Yes. That's really, really interesting because it's an evolving space. So I've got another question, what publicly available external data points do you all monitor to keep pulse on credit quality, given where we are in the economic cycle?

Lauren Law: Sure. So in the loan market, there is actually very little publicly available data. So we are obviously looking at borrower performance. You can monitor publicly available performance on things such as interest coverage and leverage levels, earnings trends and the forward-looking trajectory based on guidance. But you get a very small snapshot of the broadly syndicated loan universe when just relying on public data.

So we spend a lot of time capturing and aggregating data from our underlying portfolio to evaluate trends. We also have invested a fair deal of research dollars in alternative data sources. We are tracking for certain sectors and borrowers, social media trends and mentions for different products. We are tracking credit card data, trying to understand demand for certain industries and products. :

So there is a ton of data out there. And I would say we continue to increase where we focus and what we spend our research dollars on, in hopes that we can get more and more informed forward-looking view of the trajectories of our credits because within the loan market, just relying on public data, it's different than the equity market, and there's not as much out there that will really help you understand what these credits are going to do on a forward-looking basis. :

Kimberly Flynn: I think that was a great question. So thank you for talking about that. I don't think I even realized the lack of public information. And obviously, it highlights the value of active management. And having Octagon's expertise here is so important.

Thank you all so much for joining us. Thank you, Steven. Thank you, Lauren, for another great quarterly webinar. This webinar will be available via replay. We post all of our presentations on our website. There's also other resources on the CLO market in the knowledge bank. So don't hesitate to reach out. Thank you all very much. :

Steven Perry: Thank you.

Lauren Law: Thank you.