The following is a summary of the WhiteHorse Finance (WHF) Q3 2024 Earnings Call Transcript:

Financial Performance:

• WhiteHorse Finance reported a disappointing Q3 2024 with a net investment income of $9.2 million, or $0.394 per share, slightly below the previous quarter.

• Net Asset Value (NAV) per share decreased by 5.1% from the prior quarter to $12.77, impacted by net markdowns primarily from specific underperforming investments.

• Total investment portfolio decreased in value to $654.3 million compared to $660 million in the previous quarter.

Business Progress:

• Gross capital deployments in Q3 2024 were $51 million, with $20.8 million in net deployments after accounting for repayments and sales.

• Strategic JV with STRS saw a decrease in leverage and holds an aggregated fair value of $309.8 million in investments.

• Expanded focus on non-sponsor market to leverage opportunities with potentially better risk-return profiles due to less competition and aggressive market conditions.

Opportunities:

• Focusing on non-sponsor markets where there are better risk-return profiles and much less competition compared to sponsor markets, providing a strategic growth opportunity.

Risks:

• The portfolio experienced significant write-downs on specific investments like American Crafts and Honors Holdings, exposing the company to risks of concentrated customer dependencies and industry-specific downturns.

• A described excessive leverage in market transactions indicates a competitive lending environment, potentially leading to higher credit risks.

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