Welcome to BCP Investment Corporation Third Quarter Ended September 30, 2025 Earnings Conference Call. An earnings press release was distributed yesterday November 6, after market closed. A copy of release along the earnings presentation is available on the company's website at www.bcpinvestmentcorporation.com in the Investor Relations section and should be reviewed in conjunction with the company's Form 10-Q filed yesterday with the SEC. As a reminder, this conference call is being recorded for replay purposes. Please note that today's conference call may contain forward-looking statements, which are not that guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in forward-looking statements as a result of a number of factors, including those described in the company's filings with the SEC. BCP Investment Corporation assumes no obligation to update any such forward-looking statements unless required by law. Speaking on today's call will be Ted Goldthorpe Chief Executive Officer, President and Director of BCP Investment Corporation; Brandon Satoren, Chief Financial Officer; and Patrick Schafer, Chief Investment Officer. With that, I would now like to turn the call over to Ted Goldfarb, Chief Executive Officer of BCP Investment Corp. Please go ahead, Ted.

Good morning. Welcome to our third quarter 2025 earnings call. I'm joined today by our Chief Financial Officer, Brandon Satoren, and our Chief Investment Officer, Patrick Schafer. Following my opening remarks on the company's performance and activities during the third quarter, Patrick will provide commentary on our investment portfolio and our markets, and Brandon will discuss our operating results and financial condition in greater detail. We are pleased to report strong results for the third quarter our first earnings as a combined company on the completion of our merger with Logan Ridge on July 15, 2025. This milestone marks the beginning of a new chapter for BCIC, as we continue to leverage our expanded scale, broader portfolio diversification and enhanced operating efficiency to drive long-term value for shareholders. I'm pleased to report meaningful progress on the value creation initiatives we announced in June 2025. Notably, consistent with our previously stated intentions, the company plans to commence a modified Dutch auction tender approximately $9 million combined with the daily share repurchases executed by the company under the buyback program as well as open market purchases by management, the adviser and its affiliates. We anticipate total repurchases when combined with managements, advisers and its affiliates ownership of BCIC's outstanding stock can approximate 10% by year-end. These actions underscore our continued focus on driving shareholder value and narrowing the discount to NAV. During the quarter, we generated net investment income of $8.8 million or $0.71 per share compared with $4.6 million or $0.50 per share in the prior quarter. We expect to realize further benefits of our expanded scale and broader investment platform. For the fourth quarter of 2025, the Board of Directors approved a base distribution of $0.47 per share, which been annualized based on November 6, 2025 closing price of $12.13 per share represents a yield of 15.5%. Before handing over the call, I'd like to take a moment to address recent commentary in the broader private credit markets. While recent high-profile collapses of certain borrowers understandably drawn market attention, we firmly believe the full scale of concern for the overall private credit market is unwarranted. Echoing sentiment from other leaders in our industry, in the case of First Brands, for example, only 2% of its nearly $12 billion balance sheet was linked to private credit highlighting that events like this aren't signs of systemic weakness, if the sector has been subject to disproportionately heightened scrutiny despite its limited involvement in these high-profile bankruptcies. Looking ahead, our focus remains on disciplined capital allocation, maintaining a high-quality portfolio and delivering attractive risk-adjusted returns to our shareholders. With a larger, more diversified platform, and a stronger balance sheet, we believe we are well positioned to drive continued earnings growth and long-term value creation. With that, I will turn the call over to Patrick Schafer, our Chief Investment Officer, for a review of our investment activity.

Thanks, Ted. Overall M&A activity in our core markets continued to increase during the quarter as a combination of easing benchmark rates and more settled tariff framework gave sponsors more confidence in the macro environment. To illustrate this, over 80% of our new fundings during the quarter -- we're a new borrowers, a significantly higher percentage than what has historically been over the last several quarters. With the renewed activity has also come renewed competition on deals and overall tightening of spreads. As we've noted in the past, our focus on companies with less than $50 million of EBITDA and our sourcing of nonsponsor-backed companies provides some inflation to these trends. We continue to be selective from a credit quality perspective and are focused on maximizing risk-adjusted returns for our shareholders. Turning to Slide 10. Originations for the third quarter were $14.2 million and repayments of sales were $43.8 million, resulting in net repayments and sales of approximately $29.6 million. Overall yield on par of the new debt investments during the quarter was 12.5%. This compares to a 13.8% weighted average annualized yield, excluding income from nonaccruals and collateralized loan obligations, as of September 30, 2025. Excluding the impact of purchase discount accounting, the weighted average annualized yield, excluding income from non-accruals and collateralized loan applications, was approximately 10.3% as of September 30, 2025. Our investment portfolio at year-end remained highly diversified. We ended the third quarter with a debt investment portfolio, when excluding our investments in CLO funds, equities and joint ventures, spread across 79 different portfolio companies and 28 different industries, with an average par balance of $3.2 million per entity. Turning to Slide 11. At the end of the third quarter of 2025, we had 10 investments on nonaccrual status, representing 3.8% and 6.3% of the portfolio…

Thanks, Patrick. For the quarter ended September 30, 2025, the company generated $18.9 million in investment income an increase of $6.3 million compared to $12.6 million reported for the quarter ended June 30, 2025. Core income for the same period periods was $15.3 million and $12.6 million, respectively. The increase in investment income from the prior quarter was primarily driven by the Logan Ridge acquisition, which contributed $7.4 million of GAAP income and $3.8 million of core. For the quarter ended September 30, 2025 gross expenses were $10.3 million and net expenses were $10.1 million, which includes the $0.2 million performance-based incentive fee waiver. This represents a $2 million increase compared to $8.1 million for the prior quarter. The increase in expenses compared to the prior quarter reflects the larger combined company. Accordingly, our net investment income for the quarter ended September -- for the third quarter of 2025 was $8.8 million or $0.71 per share, which constitutes an increase of $4.3 million or $0.21 per share from $4.6 million or $0.50 per share for the second quarter of 2025. Core net investment income for the third quarter of 2025 was $5.3 million or $0.42 per share compared to $4.6 million or $0.50 per share for the second quarter of 2025. As of September 30, 2025, our net asset value totaled $231.3 million, an increase of $66.6 million from the prior quarter's NAV of $164.7 million. The increase in total NAV on a gross dollar basis was primarily driven by net realized and unrealized gains of $14.8 million, the $49.6 million impact on a GAAP basis of the Logan Ridge acquisition, partially offset by the third quarter distribution exceeding core net investment income for the prior -- compared to the prior quarter's distribution of $1.1 million. On a per share…

Thanks, Brandon. Other questions, I'd like to reemphasize how excited we are about the opportunities. The newly combined company are already creating. As we move forward, our focus remains on disciplined capital allocation, maintaining a high-quality portfolio and delivering attractive risk-adjusted returns for our shareholders. With a more diversified platform and a strengthened balance sheet, we believe we are well positioned to drive the continued earnings growth and value creation and the earnings in the quarters ahead. Thank you once again to all of our shareholders for your ongoing support. This concludes our prepared remarks, and I'll turn over the call for any questions.

[Operator Instructions] Your question comes from the line of Erik Zwick with Lucid Capital Markets.

To start first -- I wanted to start first in terms of -- with your kind of announcement of potentially repurchasing 10% of the share. Just want to make sure, is that relative to the 9.30 million outstanding balance of about 13.96 million?

It's relative to the transaction closing shares, which was about 13.2 million off the top of my head. Let me...

Yes, when we announced -- when we closed the transaction, we committed to shareholders that we buyback a bunch of stock between like as soon as practically possible. And obviously, we were in a blackout period until today. So the intention is to buyback 10% of the closing amount of shares.

But Erik, the short answer is there were not a lot of days in Q3 that we could do anything because of some of the rules around 6-day pulling off period, things like that. So it's off of a slightly higher number than the September 30, but that's going to be a decent approximation.

That's right. If you recall, we had -- I was going to say, Erik, we had to wait 60 days until after closing before we could turn the buyback back on, but we did provide some color on post quarter end. Daily repurchases in our subsequent events, which was about $1.2 million.

Actually, yes, I did see that, too. So great. Yes. That's helpful. And then secondly, looking at Slide 11 and just noticing the quarter-over-quarter improvement in your internal ratings performing versus underperforming. Was the majority of that change from June 30 to September 30, the result of the combination as well? Or is there any additional kind of upgrades going on within the combined portfolio?

Yes. I mean the short answer is like both. I mean, there were certain upgrades going into the portfolio, but the reality is we added a significant chunk through the Logan and kind of using those internal ratings kind of gives you that. So again, it's a little bit of both, but my hunch is the -- without giving the specifics like the -- it's probably the assets from Logan coming on to the balance sheet in those ratings as opposed to a broad swath of increases.

Yes, probably like the biggest surprise for us over the last 6 months is we really haven't had a lot of negative portfolio surprises. And we've had a bunch of positive portfolio surprises. And again, our LPs and our shareholders are a little rattled by some of the recent headlines out there around First Brands, Tricolor, this telecom name last week. The reality is a lot of those are really idiosyncratic. I mean a lot of them are related to fraud, #1. But #2 is a lot of the underperformance has been in their asset-based parts of their business as opposed to their cash flow-based parts of their business. So this BDC sell-off, we think, is probably overdone. It's beginning to correct a little bit, but we're not seeing broad-based weakness in our portfolio.

I appreciate the commentary there. And I would echo that sentiment just from the number of portfolios I've reviewed so far this earnings season. And just with respect to the 10 credits that are on nonaccrual at this point. Could you just kind of maybe walk through your strategy and methodology for resolving those, if there's any potential for restructurings or sales or resolutions in the near term for any of those?

Yes, Erik, I mean, the short answer is they're all very like company specific. So there's 1 name that we're in the process of restructuring and that hopefully is going to get resolved in Q4, it maybe it flips into Q1, but that's a kind of relatively near-term thing that we'll get resolved out. There's one of them that is sort of for sale in the market and hopefully, they have a couple of provisions and hopefully some are all that get resolved in Q4 and then -- but other than that, the rest of them is, again, continuing to optimize what's the best return, whether that is putting a little bit more capital to growing the businesses, whether it's looking for restructuring the balance sheet or just kind of an outright sale, each of the opportunities are sort of like one-off and have their own kind of crossing path. But there are, again, probably 2 or 3 companies that we would hope to have a near-term resolution on.

Erik, it's worth highlighting. Last quarter, you may have noticed there were 2 assets we put on cash basis income recognition, that's generally a good indicator when you start recognizing some income on the assets. And again, when those assets are current on the debt and paying their coupon interest.

Your next question comes from the line of Steven Martin with Slater Capital.

Congratulations on getting the deal done and cleaning -- starting the cleanup process. With respect to the buyback, which you know we applaud, how is that going to affect your ability to continue to do deals going forward? And can you also talk about what the Q4 activity level looks like?

Yes, I'll answer the first comment. I mean, if you look this quarter, we obviously came into the quarter with a lot of cash because we were just kind of gearing up for this, again, when you take huge step back, if you look at where spreads are in the middle market, versus where our stock trades, it's still accretive for us to buyback stock. So we aren't seeing -- there's a massive pipeline that I should really defer to Patrick on this, but we have a massive pipeline of what I would call generic sponsored finance. The ability to get premium pricing, I would say, or wider spreads. Our pipeline in that area is probably not as robust -- so we've a limited amount of supply like L475, L500 kind of thing. We're not seeing a lot of like much wider spread and stuff that we like right now. I don't know, Patrick, if you approve that.

No, those are right. I've kind of said this several times on our calls. But from our perspective, it's around getting the right pipeline in the portfolio as opposed to, as I said, that we could load up on S475, S500 (sic) [ L475, L500 ] unitranches. I'm not sure that, that ultimately spits out the right ROE for our shareholders. So we're being careful and judicious with how we actually deploy our capital, but we do have a very, very large pipeline of opportunities to the extent that sort of we feel like the credit and the pricing align with each other.

[indiscernible] your investing in your own stock at the -- where your own stock trades?

Yes, that's right. So again, we run the math every single quarter for our board and we show the math of doing a new investment versus the buyback and buybacks generally. They're kind of fairly similar, to be honest, depending on what you see on pricing, but buybacks over guaranteed return. And we feel like it's pretty shareholder friendly and we're supportive of making the right capital allocation decisions for our shareholders.

Yes. And I think it's worth noting, Steve, that, just to sort of reinforcing the point that we think it's important to do for shareholders at these prices, especially because of the day 1 have impact. However, it is hard to buyback large swaths of our equity and maintain prudent leverage ratios. So you'll note the fund is going to buyback $7.5 million. Management is going to come in and fill out the rest of the order flows for the buyback. So recognizing exactly what you're heading at.

Yes. No, look, we applaud both and we have been a proponent of management increasing its stake as well. Just out of a curiosity, has there been any further realizations. I assume most of what's in the legacy LRFC portfolio is still a lot of equity?

No, I don't think that's a fair statement. I don't have the number off the top of my head to be honest, Steve. But it's probably disproportionate relative to the rest of our book. But I would have to run the math, but I'd -- I mean, maybe it's 1/3 to 1/2 of it, $20 million or so of equity. But I would not say it's the majority of it.

Okay. On that same page, just out of curiosity on Page 10, the weighted average yield on debt investments at par is 13.8%, does that have something to do with the purchase accounting because it jumped up from 10.7% to 13.8%?

Yes, that's exactly right. So on a core basis, it's about 10.3%, Steve. But that is the impact of purchase accounting accretion you may note when you do an asset acquisition, the Board negotiates everything on a NAV-for-NAV basis, but the actual accounting for it, when you issue the equity, it actually is issued at the market price or closing stock price on the issuance date. So because of the discount to NAV on the issuance date, that creates a large disconnect between the NAV you're bringing on. And the dollar value of the purchase reflected in your financials, which creates an unrealized gain that's allocated to the cost basis of your investment portfolio, which is accretive...

I got that. You might want to consider either footnoting that or putting a second number there?

Yes, good call. Again, putting the 2 portfolios together was slightly dilutive on a yield at par basis. But as I mentioned on the call, our new origination was about 12.5% yield. So obviously, we're -- we're being thoughtful and selective about our new investments to kind of work on increasing that yield despite sort of where kind of spreads are going in the market in general.

Okay. Can you talk about PIK this quarter? It didn't move too much and what's going on, on the PIK side of the portfolio?

Steve, it actually did come down quite a bit as a percentage of the book. It's down to about 14.3% and it was pulling up what it was last quarter, but it was quite a bit higher, north of 20%, I believe. Yes, 19.5%.

As a percentage of the current quarter's income.

Yes, that's right. Yes, I mean, it's come down quite materially, Steve. It's got its come down on a combined basis by a quarter.

Yes, by 5 points. And again, we're -- as I said, like , but part of our strategy is a good amount, but -- not good amount, but we have securities on our book to have a mix of cash and cash and PIK, we have investments that we do that we look at a first-lien and a preferred equity investment together for the same company, and that preferred is PIK and the first lien is cash. So again, as you've kind of noted before, not all PIK are bad PIK, but we are certainly actively working to reduce that number and are conscious of market perception of that and are being careful as we think about new deals and how we think about allocating to kind of make sure that we are overweighting cash opportunities versus things that have a blend of cash impact...

Okay. Brandon overhead expenses and the expense side of the income statement. Is this quarter exemplary -- or is there -- does this quarter still have merger-related costs that are going to come out?

So this is actually a pretty decent run rate. Most of the transaction costs don't flow through the income statement here, they hit NAV on the closing date. There were some elevated expenses, obviously, for time spent integrating the portfolios, et cetera. However, we closed on July 15. So there's next quarter we'll have 15 days of extra expenses. However, we think that $1.9 million, $1.8 million number is a reasonable run rate for the combined.

Got it. Professional fees were elevated. Is that still residual?

Yes, exactly.

Your next question comes from the line of Christopher Nolan with Ladenburg.

Steve, just asked all my questions.

[Operator Instructions] Your next question comes from the line of Erik Zwick with Lucid Capital Markets.

Just a quick follow-up. On the topic of the purchasing accounting accretion, was all of the discount recorded in 3Q? Or I suspect there may still be potentially more so what is that balance and over what kind of time period will the remaining amount be recognized?

Yes. Brandon, but it's generally recognized over the duration of the underlying assets themselves -- so it's tough to tell you exactly in what that would be, the decline curve, if you will, is going to be based on how those assets get monetized and what their maturity dates are, et cetera.

In terms of -- go ahead.

I was going to say, Erik, there was about just north of $21 million of purchase accounting accretion. There's about $18 million left. So I would just say, generally speaking, the a lot of the purchase accounting increase in tends to work its way through the book in the first couple of quarters after closing. It is recognized over time, but obviously, you have assets with shorter maturities, things like that and natural portfolio rotation as a result of the integration that again, this quarter, we had $3.6 million on effectively a stub quarter, so.

Yes. Okay. So a greater amount up front end and it will kind of trail off as that portfolio kind of matures and pay down over time. That's very helpful.

There are no further questions at this time. I will now turn the call back over to Ted Goldthorpe for closing remarks.

Thank you all for attending our call. As always, please reach out to us with any questions, which we're happy to discuss. We look forward to speaking to you again in March when we announce our fourth quarter and full year 2025 results. Have a good weekend, and thank you very much.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.