Good morning, ladies and gentlemen. This is the operator. Thank you very much for standing by. Today's conference call will begin momentarily. Thank you very much. Again, this is the operator. Today's conference call will begin. Please stay on the line. Thank you very much for your patience. Good morning, ladies and gentlemen, and welcome to the Sound Point Meridian Capital's Second Fiscal Quarter Ended September 30, 2025, Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, this call is being recorded on Thursday, November 13, 2025. I would now like to turn the conference over to Julie Smith, Head of Investor Relations. Please go ahead.

Ladies and gentlemen, thank you for standing by. Sound Point Meridian Capital refers participants on this call to the investor webpage at www.soundpointmeridiancap.com for the press release, investor information, and filings with the Securities and Exchange Commission and for a discussion of the risks that can affect the business. Sound Point Meridian Capital specifically refers participants to the presentation furnished today on the Form 8-Ks with the SEC and to remind listeners that some of the comments today may contain forward-looking statements. And as such, will be subject to risks and uncertainties which, if they materialize, could materially affect results. References are made to the section titled Forward-Looking Statements in the company's earnings press release for the period ended September 30, 2025, which is incorporated herein by reference. We note forward-looking statements, whether written or oral, include, but are not limited to, Sound Point Meridian Capital's expectation or prediction of financial and business performance and conditions, as well as its competitive and industry outlook. Forward-looking statements are subject to risks, uncertainties, and assumptions, which, if they materialize, could materially affect results, and such forward-looking statements do not guarantee performance. And Sound Point Meridian Capital gives no such assurances. Sound Point Meridian Capital is under no obligation and expressly disclaims any obligation to update, alter, or otherwise revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. In addition, historical data pertaining to the operating results and other performance indicators applicable to Sound Point Meridian Capital are not necessarily indicative of results to be achieved in succeeding periods. I will now turn the call over to Ujjaval Desai, Chief Executive Officer of Sound Point Meridian Capital.

Thank you to everyone joining us today. And welcome to the Sound Point Meridian Capital earnings call for the fiscal second quarter ended September 30, 2025. We would like to invite you to download our investor presentation from our website, which provides additional information about the company and our portfolio. With me today is our Chief Financial Officer, Kevin Gerlitz, and his successor, Dan Fabian. And after our prepared remarks, we'll open it up for questions. We are pleased to report results for the second fiscal quarter ended September 30, 2025.

For the quarter, we generated net investment income or NII of $11 million or $0.54 a share. And recorded a net realized loss of $0.05 per share on exited investments. We paid distributions of $0.75 per share during the quarter. The shortfall in NII relative to common distributions was primarily driven by continued spread compression within the CLO collateral portfolios and lower participation in loan accumulation facilities during the quarter. Net asset value or NAV per share ended the quarter at $16.91, down from $18.50 as of June 30. During the quarter, we deployed approximately $9.2 million across two warehouse investments, purchased three new issue equity positions with an amortized cost of $14 million, weighted average GAAP yield of 15.3%. And purchased 12 new equity investments in the secondary market with an amortized cost of $31.6 million and yield of 14.2%. We also sold two equity investments with an amortized cost of $4.5 billion, refinanced the liabilities of seven equity investments. We ended the quarter with one active loan accumulation facility and two unfunded commitments totaling $3.5 billion. As of quarter end, our CLO equity portfolio's weighted average GAAP yield was 12%, versus 12.9% in the prior quarter reflecting continued loan repricing throughout the quarter. Our portfolio remained highly diversified with 94 CLOs managed by 27 managers with exposure to over 1,600 loan issuers across more than 30 on a look-through basis. We believe our diversified strategy enhances dividend stability and downside protection through evolving market conditions. With that, I'll now turn the call over to Kevin for a more detailed review of our financial highlights for the quarter.

Thanks, Ujjaval, and hello, everyone. As Ujjaval mentioned, the quarter ended September 30, 2025, we delivered net investment income of $11 million or $0.54 per share. For the quarter ended September 30, we recorded a net realized loss of $925,000 and an unrealized loss on investments of $27.4 million. Total expenses during the quarter were $9.2 million. The GAAP net loss for the quarter was $17.2 million or a loss of $0.84 per share. Moving to our balance sheet. As of September 30, total assets were $541.3 million, net assets were $346.2 million, and our net asset value stood at $16.91 per share. The fair value of our investment portfolio stood at $535.2 million while available liquidity consisting of cash was approximately $3.7 million at the end of the quarter. As of September 30, the company had outstanding debt that totaled 35% of total assets. During the quarter, we declared monthly cash dividends of $0.25 per share payable in October, November, and December. Based on our share price as of September 30, this represents an annualized dividend yield of 17.3%. On November 5, we announced monthly distributions for calendar Q1 2026 of $0.25 per share unchanged from our previously announced Q4 2025 monthly distributions. As of October 31, 2025, our estimated net asset value per common share was $16.17 per share. Finally, on November 5, in connection with my planned retirement, the board of directors appointed Dan Fabian to succeed me as chief financial officer of the company, effective December 31, 2025. Dan joined Sound Point Capital Management earlier this year as global chief financial officer and brings more than twenty years of experience in the global asset management industry. I am confident that Dan's leadership and expertise will be a tremendous asset to the company. I'll now turn the call over to Dan for a brief introduction.

Thank you, Kevin, and hello, everyone. As Kevin just mentioned, my name is Dan Fabian, and I currently serve as global chief financial officer at Sound Point Capital Management, where I lead our global finance team comprising of tax, fund accounting evaluations, as well as our risk and core technology functions. Prior to joining Sound Point, I served in a number of senior positions in asset management, most latterly as president and chief operating officer at Alcentra, where I directed firm-wide operations spanning across six credit investment strategies. I'm excited and look forward to working closely with the leadership team and Board of Sound Point Meridian Capital and stepping into this role to support the company in the years ahead. I'll now turn it back to our CEO, Ujjaval, to provide an update on the CLO market.

Thanks, Dan. Before opening up for questions, I want to give a quick update on the overall market environment for corporate loans and CLO equity. The U.S. leverage loan market is expected to maintain steady new issue supply over the next twelve months supported by a gradually improving M&A pipeline and renewed large-cap sponsor activity. Primary institutional issuance rebounded to $44 billion in Q3 2025, the highest quarterly total on record. As deal flow normalized following media disruptions. Recent large financings, including Dayforce's $5.5 billion Term Loan B backing Thomas Bravo's $12.3 billion LVL signal a more active pipeline of buyout and corporate transactions heading into 2026. While isolated credit events such as the First Brands Group's bankruptcy have attracted market attention, we view these developments as idiosyncratic rather than systemic. Overall, credit fundamentals remain healthy, supported by steady corporate earnings, conservative new issue leverage, and continued access to refinancing capital. The broader loan market continues to demonstrate resilience with default rates still below long-term averages and robust investor demand anchoring secondary pricing. In the CLO market, AAA spreads are poised to tighten further as incremental demand builds from an expanding investor base. In addition to traditional bank and insurance buyers, new vehicles such as CLO ETFs have become meaningful participants attracting sustained inflows and growing total assets above $36 billion across more than two dozen funds. This broadening demand base continues to underpin robust pricing for senior CLO tranches and supports expectations for additional spread tightening in 2026. Meanwhile, the path of interest rates remains uncertain. With market expectations pointing toward a range-bound SOFR environment in the near term. Table-based rates are constructive for both sides of the CLO capital structure, supporting continued demand for AAA tranches sustaining higher cash flows for equity investors. Through active rotation, we have increased structural optionality in the SPMC portfolio positioning it to benefit from future refinancing opportunities. Approximately 70% of the portfolio will exit its non-call period by year-end 2026, providing optionality to refinance debt at lower spreads. A reduction in debt cost may significantly offset the loan spread tightening seen year to date and increase the equity arbitrage into 2026. Which we view as a welcome development and reprieve from the challenged technical environment we have experienced in 2025. With that, we thank you for your time and would like to open up the call for Q&A. Operator?

Ladies and gentlemen, we will now begin the question and answer session. If you are using a speakerphone, please make sure to lift your handset before pressing any keys. Your first question comes from the line of Gaurav Mehta from Alliance Global Partners. Please go ahead.

Thank you. Good morning. I wanted to ask you about the loan investment opportunity. Can you discuss what you guys are seeing in the market for primary and secondary opportunities?

Hi, Gaurav. Thanks for the question. Just to clarify, you asked about the underlying loan market? The opportunities that you're seeing in the market to deploy capital both in primary and secondary markets?

Okay, sure. So I think as we discussed in the past, we have been a lot more focused on investing in the secondary market this year. The primary market arbitrage for CLO equity has been challenged because, as we have discussed, the loan spreads have tightened significantly. The liability spreads have also tightened, but not as much. And so the arbitrage has been a little bit constrained this year. And so our focus has been mostly on the secondary side. And we have and we continue to invest heavily in the secondary and have picked up very interesting paper in the market. The primary market arbitrage is slowly getting better. Still not quite there. And, you know, I think as the loan market continues to the pipeline loan market continues to improve, as a result of M&A activity in the loan market. We think that should provide some stability to spreads. We have seen spreads the tightening in spreads has stopped now. On the loan market side. And so as new issues come on board, that should certainly help improve the environment for new issue equity. But so far, this year, the focus has mostly been on the secondary side. And we are we do see good value in the equity markets and still solid yields can be obtained. In the secondary market, less so in the primary.

Okay. Thanks for that color. Second question on your comments around refinancing opportunity. Is that you mentioned more than 70% of the portfolio has refinancing opportunities. So do you think that that's enough to offset the yield compression that you're seeing in the market and should we expect the yields to remain stable because of that refinancing within your portfolio?

Well, it's, I think we post in our presentation a table that you can see that shows the change in spread in the portfolio in the last twelve months. About 36 basis points have been lost. And then if you look at on the liability side, the 70% of the portfolio that is resettable in the next twelve months, the savings on that is about 41 basis points on that portion, assuming of course, that the market stays where it is, which is a big assumption. It could go tighter, it could go wider. But as using today's market conditions, you see a 40 basis points tightening in our liability cost on 70% of the portfolio. So that more or less offsets most of that change. It's not going to be perfect obviously. But there is significant optionality there. Which, you know, obviously, have to wait for the non-call periods to be over. For us to, to get that savings. We have done quite a few resets already this year. And, you know, there's still a lot left for next year.

Okay. So assuming the market remains stable, that 41 basis points in saving, that can take you back to where the spreads were in September '24?

I mean, not on its own. Not quite. 41 is on 70% of the portfolio, so that just doing the math, it's, like, high twenties versus 35 basis points change. So it's, you know, it should be close, but not you know, there are a lot of variables obviously. We're not going to predict where things are going to go from here. But that optionality certainly makes a significant dent in the spread tightening we've seen on the portfolio side.

Okay. Thank you. That's all I had.

Okay. Great. Thanks.

Your next question comes from the line of Mickey Schiff Schleien from Clear Street. Please go ahead.

Yes. Good morning, Ujjaval. I'm a little confused about the comments. I want to make sure I understand. At the beginning, you said I think you said that the supply of capital would keep the loan market imbalanced, and you expect pressure on loan spreads to continue. But then later on, I think you said it stopped. So let me just back up. How would you describe the balance of supply and demand in the loan market and what is your, you know, sort of medium-term outlook for loan spreads?

Sure, Mickey. So I think what I was talking about was the year to date we have seen a significant imbalance in supply demand for loans. And that's what I was talking about. So it was a statement for sort of what happened in the first nine months of the year. And that resulted in effectively not much new supply of loans, but significant demand for loans. From CLOs and other investors. That resulted in significant spread tightening. In the loan market. As you've seen in every single market, credit equities everywhere else. What's changed recently is there's been a lot more activity in the new issue loan market. And from talking to various sources, capital markets folks, bankers, there seems to be an increased pipeline of M&A activity that the banks expect early next year. So if that pipeline materializes then that should result in a lot more loan supply. And that's what I'm talking about. The dynamic where if you have that loan supply that then brings the supply demand into balance and that's certainly helpful for us. So that's kind of what we feel is going on in the loan market. And because of that, we think the spread tightening in the loan market has suddenly paused. Obviously, there is a scenario where the market continues to be super benign and the demand for loans continues to outpace supply and loan spreads tighten further. But that's but if that happens obviously that should bode well for our liabilities as well. And because both markets go hand in hand. And so we can then monetize that tightening by tightening our liabilities further. But what we are showing in the table I talked about earlier is basically kind of a static picture of where the portfolio is today. And based on the market conditions today, if we were able to reset those liabilities, that's the savings I was talking about the 40 basis points on 70% of the portfolio.

Okay. I understand. That's helpful. One follow-up question, if I can. For a couple of quarters now, NII per share for your fund is running about 20¢ below the distribution. Which was raised not too long ago. Could you walk us through what factors the Board considered in keeping the dividend stable?

Sure. So I think the NII so there are, you know, obviously, various factors here. The NII drop has been because of spread compression in the underlying portfolio which we talked about. And so that has been that has been the main driver for that change. I think where we are and again, this is the point of that table is that the liabilities can be tightened which then boost our dividend yield once we can do the liability resets, right? So what we want to do is have kind of a knee-jerk reaction to one side of the equation, which is spread tightening on the asset side. Because it goes hand in hand with spread tightening on the liability side. But with a slight bit of delay. So that's what we're trying to manage to that to make sure that we don't just react to one side. The other side of the equation is very important too. Obviously in maintaining our arbitrage. And we are as the table shows every quarter we're going to make a meaningful dent in reducing that cost. Assuming the market stays where it is today. And so that's what we are effectively on a projected basis we feel very comfortable keeping the dividend where it is and that's why the board decided to keep it at $0.25 a month. We're not that far behind in terms of our sort of dividends paid out versus yield earned and you can see that from our presentation. We're running about $0.30 behind on a cumulative basis. So we could certainly catch up a chunk of that once the liability tightening can be accomplished through resets.

I understand. So it's really more of a timing thing. Those are all of my questions this morning. I very much appreciate you taking them.

Of course, Mickey. Thanks.

Your next question comes from the line of Eric Zwick from Lucid Capital Markets. Please go ahead.

Thank you. Good morning. Most of my questions have been asked and answered at this point. But just looking at that page 10 and those estimated cost savings that you've mentioned you, your expectations for continued investor interest could cause further compression. Maybe just to kind of look at it from a different perspective, you know, in the past when interest rates have gone down, we've typically seen some spread widening. And if you believe this over curve, in your expectations for fed fund cuts, we could see, you know, base rates coming down further, which could potentially maybe erode the opportunity for you to realize some of those cost savings, particularly out maybe later in 2026. So just how much confidence do you have in your ability to extract the cost savings there to offset the, you know, kind of live or asset side compression that you've already seen?

Eric, thanks for the question. I think, look, it's really hard to predict where the market is going to go. And, you know, we're not sort of experts in predicting rates right now, but there's certainly pressure on rates from both sides given the inflation dynamic as well as the labor market conditions. So we'll leave that as is. But in terms of the impact on our markets, clearly what we're saying is that if the market stays where it is certainly we can maximize these savings here. If the market goes wider you have two things going on. One the optionality to reset these liabilities is a go-forward optionality. So if you can't reset them immediately, we will be able to do them next time the market tightens. So it does create timing, but it's not a one-off option. So that's one thing. The second thing is that if liabilities do not tighten from here in that scenario, the assets will cheapen as well. And if that happens, we will be able to take advantage of that in two ways. One, our underlying portfolios, the portfolio managers that manage the CLOs we invest in we believe are top-tier managers who are very actively managing their portfolios. And to the extent there's any volatility, they can take advantage of cheaper assets to build par and improve the deals. And then as you know, we ourselves trade our portfolio quite actively and take advantage of any market volatility, any dislocation we see. Historically, I would say in the last sort of since inception of the CLO market, CLOs tend to do quite well CLO equity, particularly when there is volatility because of the optionality and the structure. And the reason why CLOs have had a challenging time this year is because of lack of volatility because spreads have gotten one way. So if there is any volatility, I think that certainly can be a helpful factor in the medium to long term. Certainly, will mean that our resets will get delayed a little bit if spreads widen out. But, I think it's more of a short-term impact. We're much more concerned on medium-term improving the outlook for the portfolio.

That that's helpful, I appreciate the commentary. So it sounds like, you know, you're confident in the longer-term arbitrage opportunity still exists and there just may be some kind of short-term dislocations in terms of, you know, maybe assets repricing faster than you have the ability to liabilities, but over time, the opportunity remains, which is good to hear. So, that's all that's all I have for today. Thank you for

No. I think they just to confirm that. Yeah. I think that the reason why we you know, this mismatch exists is because assets can reset loans can reset in six months while CLO liabilities are non-call for two years. So that's six months versus two years. That's the timing mismatch. And of course, it's very hard to predict where that goes going forward. But I think there are a lot of tools that we have that can be used to make sure that or a medium to long term the portfolio does well. Notwithstanding short-term kind of fall that you will see from market movements.

Understood. Thank you.

Alright. Thanks, Eric.

Your next question comes from the line of Tim D'Agostino from B. Riley Securities. Please go ahead.

Hi. Thanks for taking the question. Just one for me on net asset value per share. Seems like there's a pretty substantial decline in the quarter. Looking at the balance sheet, obviously, you added the preferred b line and the repo. But I guess, you just provide more color on some of the drivers behind that decline quarter over quarter? Thank you.

Sure. So the decline again, all roads lead to the same, fact, which is that spreads have tightened in the underlying loan market and liability spreads haven't tightened as much. So if you think about a portfolio of CLO equity, that's already in the ground, existing portfolio, if loans get repriced, the income component goes down. And that reduction is not matched by any liability tightening because that's still months away. What happens is that you get less income for equity and that is then that means there's less, sort of yield. Again, assuming liabilities stay where they are. End up with less yield. And that means the NAV of the portfolio keeps dropping because the CLO equity is marked based on discounting future cash flows at a required market yield, which hasn't really changed. This year. So the yield for CLO equity is still more or less what it was at the beginning of the year. But the cash flows have dropped. So that results in the mark to market sort of all these equity positions dropping. And we've seen that sort of, you know, if again, just rough math, if you have a 30 basis points or let's say 36 basis points in the last year, of spread reduction in the portfolio. That 36 basis points because of the leverage in the CLO structure means 400 basis points of drop in income per year. And that can result in 10%, 12% drop in the equity price. And so that's what we have seen. That's offset by the income we generate in the portfolio itself, but the NAV is going to be impacted. So that's it's all linked to the same factor and that's where the NAV is down. In the last quarter.

Okay. Great. Thank you so much.

Of course.

Thank you very much. There are no further questions at this time. I would like to turn the call back to Ujjaval Desai, CEO for closing comments. Sir, please go ahead.

Great. Well, thank you everyone for listening in today. I appreciate your support and your questions, and we'll look forward to seeing you again next quarter. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.