Investcorp Credit Management BDC, Inc. (NASDAQ:ICMB) Q4 2020 Earnings Conference Call - Final Transcript

Sep 15, 2020 • 01:00 pm ET

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Investcorp Credit Management BDC, Inc. (NASDAQ:ICMB) Q4 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome to the Scheduled Earnings Release Call, Fourth Quarter Ended June 30, 2020.

Your speakers for today's call are Mike Mauer, Chris Jansen and Rocco DelGuercio. [Operator Instructions]

I'll now turn the call over to your speakers. Please begin.

Executive
Michael C. Mauer

Thank you, operator, and thanks to all of you for joining us today. I'm joined by Chris Jansen, my Co-Chief Investment Officer; and Rocco DelGuercio, our CFO.

Before we begin, Rocco will give you our customary disclaimer regarding information and forward-looking statements. Rocco?

Executive
Rocco DelGuercio

Thanks, Mike. I would like to remind everyone that today's call is being recorded and that this call is the property of Investcorp Credit Management BDC. Any unauthorized broadcast of this call in any form is strictly prohibited. Audio replay of the call will be available by visiting our Investor Relations page on our website at icmbdc.com.

I would also like to call your attention to the safe harbor disclosure in our press release regarding forward-looking information and remind everyone that today's call may include forward-looking statements and projections. Actual results may differ materially from these projections. We will not update forward-looking statements unless required by law. To obtain copies of our latest SEC filings, please visit our Investor Relations page on our website.

At this time, I would like to turn the call back to our Chairman and CEO, Michael Mauer.

Executive
Michael C. Mauer

Thanks, Rocco.

The COVID pandemic is persisting far longer than we had hoped, the economic effects that cut across demographic and geographic lines. There has been immense suffering across the globe. And we have been beyond fortunate that our team remains safe and healthy and that our focus on the portfolio is undiminished by our work-from-home environment. We hope that all of you are coping well in this difficult time.

Some of our portfolio companies have been affected by the economic fallout of COVID, causing one restructuring and several markdowns. Other portfolio companies have weathered the storm and even thrived. Our effort to diversify the portfolio over the past years has helped to reduce the effects of sectors or individual borrowers on the portfolio as a whole.

By decreasing our average position size, increasing our borrower count and industry diversification, we have reduced risk and helped protect shareholder capital. There's still more to do, but we are proud that our underwriting work and credit standards have allowed us to address the number of distressed situations in the current environment and provide for future recoveries over the medium term.

Oil and gas, once, by far, our largest industry exposure, now ranks third, and we have more borrowers with smaller average position sizes. We have no E&P investments and our borrowers are geared toward maintenance and ongoing production activity. We have avoided other hard hit sectors as well, such as brick-and-mortar retail and restaurants. Our sole retail exposure, Golden Hippo, is an exclusively online consumer products Company and has been outperforming our underwriting expectations.

Despite the persistent volatility of the market, increasing bids in the syndicated loan market and