The following is a summary of the Great Elm Capital Corp. (GECC) Q2 2024 Earnings Call Transcript:

Financial Performance:

• GECC reported a Q2 NII (Net Investment Income) of $3.1 million, or $0.32 per share, compared to the first quarter's $3.2 million, or $0.37 per share.

• NAV per share decreased from $12.57 at the end of March to $12.06 at the end of June, primarily due to illiquid Level 3 investments on nonaccrual.

• Total debt outstanding as of June 30 was approximately $178 million, with available credit from an undrawn $25 million revolver, increasing to approximately $200 million pro forma for the July bond issuance.

Business Progress:

• GECC raised $12 million in equity at net asset value and issued an additional $22 million of GECCI notes through a registered direct offering.

• Created a JV for investments in CLOs, beginning to receive distributions from these investments in July.

• The portfolio's exposure to first lien loans and CLOs increased to 60%, up from 44% the previous year.

• Refinancing plans are underway for the baby bond maturing in 2025.

Opportunities:

• The successful capital raises and debt issuances demonstrate strong market confidence in GECC's financial health and strategic positioning.

• Expansion into CLO products and structured financial vehicles expected to deliver income in the mid-teens to low 20%, enhancing the investment portfolio diversity and return potential.

• Anticipation of stronger second-half NII performance and sustained dividend coverage due to strategic capital deployments and income from CLO investments.

Risks:

• Decline in NAV due to nonaccrual positions in illiquid Level 3 investments adversely affecting financial health, though recovery efforts are improving.

• Cash drag effects and the impact of timing from certain investment distributions contributing to fluctuating NII.

More details: Great Elm Capital IR

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