The following is a summary of the WhiteHorse Finance (WHF) Q2 2024 Earnings Call Transcript:

Financial Performance:

• WhiteHorse Finance reported GAAP net investment income (NII) and core NII of $9.3 million, or $0.40 per share for Q2 2024, which was a decrease from Q1 2024 GAAP and core NII of $10.8 million, or $0.465 per share.

• NAV per share ended at $13.45, a 0.4% decrease from the previous quarter, influenced by net markdowns in the portfolio totaling $1.5 million.

• The weighted average effective yield on income-producing debt investments increased slightly to 13.8% at the end of Q2 2024.

Business Progress:

• WhiteHorse Finance's investment activity included $55.8 million in gross capital deployments during Q2, primarily through seven new originations and nine add-ons, offset by high repayments and sales totaling $71.7 million.

• The BDC transferred several new deals to the Ohio STRS JV, thus, maintaining active portfolio management.

• Despite a softer quarter, WhiteHorse continues to focus on originating deals in the non-sponsor sector due to its relative attractiveness.

Opportunities:

• WhiteHorse is focusing on non-sponsor deals in the current borrower-friendly market, which remains less aggressive compared to sponsor markets.

• The company anticipates the Fed will begin to reduce interest rates in Q4 2024, potentially revitalizing economic activities and private equity transactions.

Risks:

• Elevated repayment activities and a borrower-friendly credit environment allow borrowers to lever up and potentially refinance at aggressive conditions, which WhiteHorse might avoid due to risk concerns.

• The broader economic softening impacts consumer and business demand, adding uncertainty to future portfolio performance.

More details: WhiteHorse Finance IR

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