Good day ladies and gentlemen and welcome to the Second Quarter, 2014 Solar Senior Capital Limited Earnings Conference Call. My name is Crystal and I will the operator for today. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Michael Gross, Chairman and CEO. Please proceed sir.

Thank you very much and good morning. Welcome to Solar Senior Capital Limited’s earnings call for the quarter ended June 30, 2014. I’m joined here today by Bruce Spohler, our Chief Operating Officer; and Richard Peteka, our Chief Financial Officer. Rich, would you please start off by covering the webcast and forward-looking statements.

Of course, thanks 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 Limited, 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 the number of factors, including those described from time-to-time in our filings with the SEC. Solar Senior Capital Limited undertakes no duty to update any forward-looking statements, unless required to do so by law. To obtain copies of our latest SEC filings, please visit our website or call us at 212-993-1670. At this time, I would like to turn the call back to our Chairman and CEO, Michael Gross.

Thank you, Rich. As we mentioned in the earnings call for Solar Capital early this morning, credit markets continue to be challenging. We appear to be entering a more volatile environment, where investor sentiment is driven alternatively by geopolitical macro risks; the prospect of rising interest rates and conflicting data on the quality and degree of U.S. economic traction. Interestingly, after a long run of positive inflows, market technicals for bank loan funds and ETF turned negative over the last quarter. These outflows were somewhat offset by robust CLO issuance. As a result, the syndicated leverage loan market remains fully priced and characterized by tight spreads, high leverage ratios and loose covenant structures. Spread compression is more muted in less liquid markets for middle-market senior secured loans. However, the availability of debt continues to favor middle market borrowers in the current environment. Risk levels in the second quarter were roughly similar to what we saw in Q1. Against this backdrop we continue to be highly selective with our investments. In the second quarter, portfolio activity resulted in new investments of $47 million across nine portfolio companies and sales and repayments of $39 million. Originations continue to hold steady at approximately $50 million per quarter on average; sales repayment remain stubbornly elevated through the first half of 2014. Over the last five quarters repayments in sales have averaged over $41 million. Based on the recent vintage of the SUNS portfolio and our current visibility, we anticipate lower levels of repayments and portfolio growth in the second half of 2014. At present, 100% of our portfolio is performing and the credit quality with a diversified portfolio of senior secured floating rate loans remains strong. The weighted average yield of the portfolio based on fair value was 7.4% in June 30. In comparison,…

Thank you, Michael. Solar Senior Capital Limited’s net asset value at June 30 was $205.9 million or $17.85 per share, compared to $208.0 million or $18.04 per share on March 31. Our investment portfolio at June 30 had a fair market value of $265.9 million compared to $274.9 million at March 31. At June 30 we had investments in 37 portfolio companies in 20 industries versus 37 portfolio companies across 22 industries at March 31. The weighted average yield on our income producing portfolio was 7.4% at June 30 versus 7.7% at March 31, measured at fair value. For the three months ended June 30, gross investment income totaled $5.1 million compared to $5.7 million for the three months end March 31. Expenses totaled $2.7 million for the second quarter compared to $1.9 million for the first quarter. The increase in expenses from the prior quarter was primarily a result of an approximate $1 million charge related to the June 30 amendment and extension of credit facility. The company’s net investment income for the three months ended June 30 totaled $2.4 million or $0.21 per average share, excluding the approximate $1 million charge related to the amendment and extension of our credit facility. The company’s net investment income would have been $3.4 million or $0.29 per average share versus $3.9 million or $0.33 per average share for Q1, 2014. Net realized and unrealized loss for the three months ended June 30 totaled approximately $0.5 million, compared to net realized and unrealized gain of $0.1 million in the three months ended March 31. Ultimately the company had a net increase and net assets resulting from operations of $1.9 million or $0.17 per average share for the three months ended June 30. This compares to $4.0 million or $0.35 per average share for the three months ended March 31. At this time, I would like to turn the call over to our Chief Operating Officer, Bruce Spohler.

Thank you, Rich. Let me begin by providing a portfolio update. Overall, the financial performance of our portfolio of companies remains steady to modestly improving. While the portfolio is broadly diversified across multiple industries, we continue to favor issuers operating in more defensive, non-cyclical industries. At June 30 our portfolio was 100% performing and we feel confident about the prospects of our company’s operating performance. At June 30, the weighted average yield on our portfolio was 7.4% based on fair value. Our internal risk assessments on our weighted average of our total portfolio remained at approximately 2 based on our 1 to 4 risk rating scale, with 1 representing the least amount of risk. SUNS portfolio ended the second quarter with investments in 37 issuers across 20 industries. The average position is approximately $7.2 million. Our portfolio was invested 84% in senior secured loans; 13% in Gemino Senior Secured Healthcare, whose portfolio is also comprised 100% of senior secured loans; 2% in unsecured loans and 1% is common equities, excluding our investment at Gemino. Including our investment in Gemino is 100% floating rate. Close to 93% of our income producing portfolio is floating rate and only 7% is fixed rate. In the second quarter SUNS made investments of approximately of $47 million across nine portfolio companies and had sales and repayments of approximately $39 million. Before I give you an overview of our Q2 activity, let me provide an update on Gemino. At quarter end Gemino had approximately $177 million committed senior secured revolving of term loans with approximately $102 million of funded assets. The highly diversified commitments are across 34 separate insurers, having an average loan balance of approximately $3 million. All of the commitments from Gemino are floating rate senior secured cash paid loans. During the quarter end…

Thank you, Bruce. In conclusion I would like to repeat the goal of SUNS is to build and manage a diversified portfolio of attractive senior secured credits that will generate a steady and stable distribution stream for shareholders, while protecting capital. Being fairly compensated for risk and having our loans repaid remains top priorities of our underwriting philosophy. Our collective experience operates through various credit cycles has taught us to remain disciplined in our investment process and highly selective, particularly in liquidity driven markets, such as the one we are navigating presently. As significant owners, principles and shareholders of this business, you can be assured we will continue to take a prudent and patient approach to deploying our variable capital. While we remain focused on increasing the efficiency of our capital structure by growing our portfolio, we are not willing to compromise our credit standards in order to achieve target leverage. Given the recent vintage of the SUNS portfolio, its visibility into the third quarter activity, we believe the high level repayments will abate and expect to grow our portfolio more meaningfully in the second half of 2014. We continue to believe that the senior secured middle market asset class remains attractive on both a relative and absolute basis. SUNS currently is a well diversified 100% point portfolio of primarily senior secured floating rate loans, trading at about 0.9 times book value and yielding approximately 8.7% and has ample capital to make additional investments. The risk awarded value composition investment in our stock is compelling when compared to the liquid syndicated high yield and bank loan markets. SUNS yield of approximately 8.7% compares favorability to the 5.4% yield of the Barclays high-yield credit corporate index and a 6.2% weighted average yield on a representative sample of closed end bank loan funds. Today we are in line in a number of important initiatives we have taken to enhance our long term competitive position and to more efficiently utilize SUNS balance sheet, including one, having recently added two senior investment professionals to support origination efforts; seeking joint venture capital partners to expand our hold-levels in first lien senior secured loans and continuing to pursue proprietary investment opportunities in niche (inaudible) finance companies to further diversify our portfolio with differentiated risk return; and lastly, by securing SEC exempt of release to our co-investments with SLRC. We are managing our portfolio and balancing prudently given the faulty markets, continuing global macro uncertainties and the prospect of increasing rates. Thank you for your time this morning. We look forward to speaking next quarter. Operator, please open the line for questions at this time.

(Operator Instructions) Our first question will come from the line of Ron Jewsikow from Wells Fargo Securities. Please proceed.

Good Morning and thanks for taking my questions. You mentioned that you are looking for strategic initiatives that would allow for larger hold sizes. Somewhat to what you announced at SLRC with uni-tranche investments, given the overlap of this asset class between the two vehicles, is there any potential that you could form a pro rata venture between SLRC-SUNS and an independent third-party or would the ability to co-invest strictly relate to individual transactions?

I'm sorry. Could you repeat the question?

Yes. Now you have the ability to co-invest between SLRC and SUNS and you are looking to form a strategic initiative, which sounds like a uni-tranche fund.

Let me interrupt you there. So, what we are looking to do underneath SUNS is not a uni-tranche fund. It’s to invest in the same senior secured loans that it’s based on what our portfolio is made up of and those assets would not be high yielding up to put into the Solar type structures. So we are looking to really expand our hold size of the loans that SUNS is currently buying today.

Okay, sorry, and then I guess I just read between lines wrong about the larger hold sizes. And with the amendment to the credit facility, was there a change in the advance rates on let’s say second lien investments or was it strictly just more flexibility?

Yes, it was really more flexibility in terms of how we can put collateral into the borrowing base, as well as extending our maturity.

Okay. Thanks for taking my questions.

Our pleasure

(Operator Instructions). Our next question will come from the line of Mickey Schleien with Ladenburg. Please proceed.

Yes, good morning. I just wanted to follow up on the uni-tranche proposal at Solar. In the previous call you mentioned some of those opportunities might be partially allocated to SUNS. I was just trying to get a sense of what size or what size of pieces you could put into the SUNS portfolio, given that those could be relatively higher yielders than what customarily we see there.

Yes, I don’t think that Mickey you would expect us to put much different sizing than we are already putting into SUNS on any asset, just from the diversification perspective across the portfolio. So as you are seeing, we generally are in the $7 million to $15 million. Most of our positions as you know are probably around $10 million on average at SUNS. So I think that’s a good proxy.

Okay, thanks Bruce.

Thank you.

(Operator Instructions). With no future questions, I would like to turn the call back over to Michael Gross for closing remarks.

Thank you this morning for all your time and your questions. We look forward to speaking to you on our next quarter.