Great Elm Capital Corp. Q4 FY2023 earnings call

• Capital Raise: On February 8, GECC issued 1.850 million shares at $12.97 per share (25% premium to prior day's closing), with Great Elm Group investing $6 million and a strategic institutional investor investing $18 million, increasing scale and operating efficiencies.
• NII Performance: Fourth quarter NII was $3.3 million, full year NII exceeded dividends. NAV per share grew to $12.99, up from $12.88 prior quarter, with 16% growth over 2023 driven by investment gains.
• Revolving Line of Credit: Amended $25 million revolving line, extending maturity to May 2027 and reducing cost to SOFR plus 3%, providing flexibility.
• Portfolio Rotation: Deployed ~$30 million into new investments at 14% average yield, monetized $36 million of assets at 11% average yield, 98% of Q4 deployments were first lien investments.
• Hiring: Jason Schwartz joined as Chief Credit Officer for Specialty Finance to drive growth and assist with lending arrangements.

In the Specialty Finance segment, Prestige experienced invoice financing volume weakness in the back half of 2023 but saw volumes pick up again in Q1 2024 and is expected to have a strong year. Great Elm Healthcare Finance continued to have robust deal flow and is poised to take advantage of healthcare market dislocation in 2024. Sterling Commercial Credit built out its asset based servicing capabilities with a strong pipeline in the fourth quarter, and a new asset based and asset backed financing vertical is being developed in collaboration with various bank and non-bank capital providers. Financials: Fourth quarter NII was $3.3 million, full year NII was $12.5 million or $1.65 per share. Net assets as of December 31 were $99 million, and NAV per share was $12.99.

• Well positioned to cover quarterly base distribution throughout 2024.
• Focus on continuing capital raising initiatives and growing the business.

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