XAI Octagon Floating Rate & Alternative Income Term Trust — Earnings Call Q3 2026

Kevin Davis: Good afternoon. Welcome to the XFLT Third Quarter Update Webinar. Thank you so much for joining us today. We've got a lot to cover. We're excited to get to the featured speakers here today. Before we do that, we do have a few housekeeping items we need to cover. Let me first begin with some brief introductions. I'm Kevin Davis with XA Investments. I head up sales and distribution for the firm. I'm happy to be joined today by Young Choi, who is a partner and the Global Head of Trading at King Street Capital Management. He joined the firm in 2006 and serves as the Portfolio Manager of Rockford Tower, which is King Street's CLO, CBO and SMA platform. Today, Mr. Choi will be covering the potential investment opportunities that he sees for XFLT, some of the asset allocation updates that have taken place in the portfolio as well as the outlook for the fund and the asset class going forward. We're also joined today by my colleague, Kim Flynn, who is the President of XA Investments. Kim will be walking us through the financial highlights of the quarter. She'll discuss the recently completed initial tender offer and provide some analysis on recent trading trends of the fund and its peers. Before we get into the presentation, we do have a few important disclosures that we want to address. We will be talking about performance throughout the presentation. Past performance does not guarantee future results and current performance may be higher or lower than the performance data quoted. We will also be discussing market outlook, and the materials do contain forward-looking statements. Investors should not place undue reliance on forward-looking statements. We encourage you to review all of the general disclosures of the presentation. One last housekeeping item. Please note the Q&A box at the bottom of the screen. If you have any questions, please type them into the box, and we'll do our best to answer them in real time. We'll also open up for questions at the end of the prepared remarks. And if you don't get your questions answered, please feel free to contact me directly, and we'll get those answers for you. Lastly, please check out our website, xainvestments.com to find out information on the fund, on our firm, get some general educational materials about the asset class and some of the things that we're working on in-house. Okay. So let's get started. As many of you are aware, XA Investments serves as the adviser for XFLT. We are a Chicago-based boutique alternative manager that was founded in 2016 with roughly $800 million -- $850 million of assets under management as of September 30 of this year. We have a suite of proprietary registered funds focused primarily on alternative income and equity risk mitigation. We have 2 listed closed-end funds as well as an interval fund, which is also sub-advised by King Street Capital. That is focused primarily on BB CLO debt. And we have a multi-strategy hedge fund portfolio structured as a tender offer fund that is sub-advised by Evanston Capital. Lastly, in addition to our suite of proprietary funds, we do have a robust consulting and research practice focused on the closed-end fund, interval and tender offer fund markets. We do help outside firms design, build and launch products into the marketplace, and we publish research to help in those efforts. We also make our research available on a subscription basis for interested parties that are looking to learn more about the space. I'm also excited to introduce the sub-adviser on the fund, King Street Capital Management. King Street is a global alternative investment manager with over $30 billion of AUM, was founded in 1995. They established Rockford Tower, which is its dedicated CLO platform in 2017. Rockford Tower manages nearly $15 billion across multiple U.S. and European CLOs and various fund structures. Since 2017, Rockford Tower has been recognized for numerous industry awards, including being named Best U.S. CLO Manager in 2020 and Best New U.S. CLO as recently as April of '26. We are thrilled to be working with them. Okay. Let's get to the topic at hand here today. We have some prepared questions and topics for the speakers that we'll address throughout the presentation. And a quick reminder, if you do have questions for the speakers, please type them into the Q&A box at the bottom of the screen. With that, let me turn the call over to Kim Flynn to begin with the financial highlights. Kim? Kimberly Flynn: Thanks, Kevin. You're always a tough act to follow. So thank you so much for kicking us off, and I'll cover financial highlights. I also wanted to explain to our audience the timing of this call. We were eager to get King Street in front of you. So we shifted the timing of our quarterly call earlier in the month of November. We usually wait until we have the financial statements that have been published. So please look out for our annual report. We have a 9:30 reporting period. So you'll see that on the SEC website. You'll also see it on the XFLT website if you're looking for the full fiscal year financial report for the period ended September 30. That is getting audited as we speak per normal, normal course, and you'll see more information about that. But we wanted to host this webinar because the timeliness is important and, sort of, avoiding -- we didn't want this webinar to get lost in the Thanksgiving and Christmas holiday rush that happens to all of us. So there's limited financial highlights. But like we normally do, we report to you on net investment income for the quarter ended September 30, and that was at $0.58 -- a little over $0.58 per share. We do continue to have steady monthly distributions. Those are declared and paid monthly. No change recently there. As of September 30, total managed assets were slightly higher at $566 million than they are today, and that's a result of the tender offer that we're going to talk about in a moment. We get questions from time to time from investors in the fund. They want to know where the assets that XFLT is investing in where we're seeing observable mark prices. And specifically, I'll note that CLO equity is still trading in the $0.40 on the dollar we've yet to see recovery in CLO equity pricing. CLOs are still attractive for their income generation potential, currently yielding about 19.9%. CLO equity is a big part of this fund. It's about 40% of the exposure and has been since inception. So we always want to talk to you about where the current market is pricing the different investments in the portfolio. Senior loans is another big part of this portfolio. And we'll talk about some of the changes, including the incorporation of asset-backed securities, European CLO debt, European CLO -- with the capabilities that King Street has brought to the table. So we'll talk about that in a moment. Kevin Davis: Thanks, Kim. So I introduced King Street and Rockford Tower at the outset here. Could you discuss the transition to Rockford Tower and some of the recent actions XA Investments has taken to support XFLT? Kimberly Flynn: Yes. So we've gone through a process with the Fund Board. And with the recent change, King Street assumed portfolio management responsibilities at the end of July, and they are going through a process to seek to improve the portfolio in terms of the mix of securities, which we are happy with the changes, the ongoing, sort of, transition that King Street is taking XFLT through. And this is all seeking to improve underlying NAV performance and ultimately, secondary market price performance. The fund, like its peers, the CLO funds in the marketplace, have been under pressure for most of 2026. And so we are doing what we can to focus on NAV performance improvement, which hopefully, secondary market performance will follow the improvement in NAV that we're seeking. We have done a number of things that we think, based on feedback from shareholders, has been appreciated, which is the tender offer, the results of that were just announced earlier in October. And we plan to continue to do more to promote the benefits of investing in CLO debt and CLO equity. And this is really an opportunity for investors who want to get exposure to King Street. There's no other vehicle in the marketplace in the U.S. that taps into their skills and their capabilities. So we're continuing to educate and showcase what King Street can do in the secondary market. There'll be more from us. We're proactive. We -- in addition to hosting these quarterly webinars, our firm has always been very focused on trying to drive awareness in the secondary market, not just for XFLT, but for the CLO debt and equity investment opportunity. We know we appreciate that there are more ETFs in the marketplace that invest specifically in CLO debt. So that has brought a wider audience to the listed closed-end funds, which hold much more -- there's more heavy allocation to CLO equity. The ETFs in the marketplace are largely limited to CLO debt. But nonetheless, to the extent that someone is an investor in an ETF and is newer to the CLO debt, CLO equity asset class, we think that there's been an expansion in the addressable market for products like XFLT, and we're doing what we can to reach those investors who have an interest in the CLO market. Kevin Davis: Kim, you mentioned the recent tender offer. And as you said, the results of that initial tender were announced on October 21. Can you provide an overview of the transaction and then explain how the additional contingent tenders will work? Kimberly Flynn: Sure. This is the first of 3 that -- of tenders that were outlined to help support the secondary market. And the second and the third proposed tenders are contingent upon the trading performance at the time. So I'll go into that in a moment. The tender offer provided liquidity for shareholders who have been long-time investors in XFLT and seeking liquidity at NAV were able to exit XFLT in the tender offer. I think given the trading performance of XFLT and other peer CLO funds, it was not surprising to us that there was demand for liquidity and shareholders were prorated in terms of people who put in for the tender. So it was partial liquidity. We appreciate that not everyone that tendered shares was able to exit. It was for up to 12.5% of the fund's outstanding common shares. And so it provided liquidity. I would say that the impact of the tender offer prior to the tender was that the fund's share price had tightened up quite a bit. We have seen a widening out of the XFLT share price since that tender offer was closed. You see it in the bottom graph on the right-hand side, the blue line is indicating XFLT's price, which is now basically back trading where the fund was prior to the tender offer. I think this falls in line with other observed tender offers for listed closed-end funds. In terms of sustained price recovery, we need to see demand for XFLT's shares in the secondary market. And XFLT had, in terms of its price, behaved as we expected it would going into the tender offer close. Maybe we can go to the next slide, and I can talk about the remaining elements of the discount management program. The terms are similar between the first contingent tender offer and the second contingent tender offer. So you don't necessarily need to read the full text. But to the extent that the fund is still trading at a specified discount to NAV, then we would go ahead and do a subsequent tender, one at approximately 13 months following the completion of this initial tender in October of '26. And the second one would commence approximately 25 months after the completion of the tender. So it's a contingent tender. So it's only if it's needed or necessary to help support where the fund is trading in the secondary market. None of us know quite where we'll be in 13 months or in 25 months, but we wanted to have this supportive measure with respect to discount management in the marketplace, and that's why the combination of these 3 together comprise the discount management program. If anybody has any questions on what that might look like closer to the date of the contingent tender, happy to address -- and yes, I think -- so Kevin, I think that covers it in terms of what we have planned in the future to the extent that it's necessary to support XFLT in the secondary. Kevin Davis: Thank you, Kim. And so let's take a step back. For the benefit of anyone newer to the fund, Kim, can you provide a brief overview of XFLT and potentially discuss how the fund is positioned today? Kimberly Flynn: Sure. So on the pie chart on the bottom right corner, you'll see that this pie for long-time investors in XFLT, the fund had been allocated to primarily first lien senior loans, which is the blue shown here at 40% and then CLO debt and equity. And with the King Street management team coming in, there's opportunities for them to deploy capital in a way that's a little bit different. And going forward, we expect there to be a dynamism in terms of how these allocations based on where there are market opportunities. So asset-backed exposure is a strength of King Street and one of the new opportunity sets. And when there is an opportunity to invest in European debt and European -- excuse me, CLO debt and CLO equity. At the appropriate point, King Street can pivot and include those allocations. With European CLO debt and equity, there can be times where it's favorable to introduce CLO debt and equity and there's times when U.S. CLO debt and equity may be more favorable. So the ability to pivot between those different opportunities. We see that in some of the market-leading CLO equity-focused listed closed-end funds in the marketplace. The ability to go between European and U.S. opportunities has benefited those funds. So we like that with King Street's capabilities, we have the ability to be dynamic in terms of how that asset allocation might shift. So we've already seen some small shifts -- and King Street's mandate is to run the portfolio in a way that is seeking to add value for shareholders. So they're not going to make changes, willy-nilly, in terms of -- and so we're going to see this evolve naturally as time lapses and some of those market opportunities present themselves. Kevin Davis: Thanks, Kim. I've got one more question for you before we bring Young into the conversation. And you did touch on some of this, but could you speak about the expanded opportunity set that King Street brings to the table with XFLT and some of the potential benefits to shareholders? Kimberly Flynn: Sure. So yes, my colleague, Luke, has put together this nice summary of what I had just mentioned in terms of the expanded opportunity set. So you're going to see that pie chart continue to evolve. The benefit we think is improved performance over time. We think the benefit is potential yield opportunities. We want the portfolio manager to be able to shift and to move where they see opportunity. And this expanded opportunity set is right in line with the capabilities that Rockford Tower has internally. So we're not asking the Rockford Tower team to do anything new or different. We just now have this opportunity with XFLT to tap into the investment people. King Street has 8 offices around the globe with investment professionals sitting in these different markets. So it brings a fresh perspective and an expanded opportunity set for XFLT investors that we're really excited about. Kevin Davis: Young, I'd like to move to you and bring you in the conversation. As you took over portfolio management responsibilities at the end of July of this year, what was your assessment of the portfolio? And where are you seeing the most opportunity for XFLT? Young Choi: Sure. First of all, thank you, Kevin, and thank you to everyone for joining today. When we initially took a look at the portfolio at the end of July when we took over, we saw several clear opportunities. As Kim discussed on the prior slide, the fund has an expanded investment opportunity set. And King Street has a long history of investing globally across a range of credit asset classes, including loans, CLOs and asset-backed securities. So expanding beyond just U.S. loans and CLOs to include global markets and ABS really gives the fund more flexibility to pursue the best relative value opportunities at any given time. These asset classes are often correlated, but they don't move in unison, which creates opportunities to capitalize on any dislocations that may happen. So we see 3 ways to act out on that opportunity. First is to broaden the asset classes in which the fund could invest, as we talked about. Second is to optimize our holdings within each asset class. So it's really asking the question of, are we invested in the most attractive loans? Are we invested in the most attractive CLO tranches? And the third is being able to rotate among asset classes as relative value changes. And we'll discuss this in more detail on following slides, but here are just a few examples of what it means in practice. We're looking to rotate from secondary CLO debt into reset transactions, for instance. Here, we find bonds with similar credit quality but at higher yields. Synthetic risk transfer, or SRT, was the fund's first ABS investment. And these transactions can offer portfolios with higher credit quality than typical CLOs at comparable or higher yields. And so we're finding some interesting opportunities there on a risk-adjusted basis. We've also sought to shorten the portfolio's maturity profile and also to rotate into high conviction discounted loans that can offer upside convexity. And then finally, given the volatility in rates and the recent backup in the high-yield markets, we see the potential for more opportunities in fixed rate bonds. And then we've also, I would say, rotated more into defensive sectors in response to the risks we see in the macro environment. Kevin Davis: Thank you, Young. So let's dig a little deeper on asset allocation. And as you look into the portfolio, how have you been shifting XFLT's asset allocation to align with these opportunities that you're seeing in the marketplace? Young Choi: Sure. And this builds on what we've been discussing earlier about rotating among asset classes. You can see that we've added ABS to the portfolio. We've reduced and consolidated the loan exposure, which we'll discuss on the next slide. And we've also made small increases in the fixed rate corporate bonds. We've also reduced the money market exposure to limit cash drag. And as the opportunity set evolves, the goal is to constantly rotate the fund into the most attractive risk-adjusted investments. And one point to keep in mind is that every rotation involves transaction costs, and this is often reflected in the bid-ask spread. And those costs vary by asset class. So for example, the bid-ask spread in CLO equity is typically much wider than on a corporate bond. So we're continually weighing the potential benefit of a trade against its cost to the portfolio. Kevin Davis: So young, if we're looking at, sort of, a trading summary, if you will, let's look at the trading within the portfolio. Can you speak to the level of trading you and your team have done and how you've consolidated the number of holdings of the fund? Young Choi: Sure. The team has been very active in both identifying new opportunities and rotating within asset classes. So in loans, we've consolidated the portfolio into fewer larger positions. We've reduced the number of issuers, I would say, by more than 20% and the number of line items by nearly 30%, while increasing the portfolio spread by roughly 17 basis points. As mentioned earlier, we've also added to the ABS allocation. And in CLOs, our trading has focused on maintaining credit quality while increasing yield. And we've done that by primarily selling secondary positions and adding exposure through the reset market. So I would say the team has been fairly active in the course of the last couple of months. Kevin Davis: Thank you. So let's now drill down on the loan market. Could you provide an overview of the market? And then in your opinion, what challenges are loan investors facing? And where are you finding the opportunities? Young Choi: Sure. So the leveraged loan market has grown into a very large and diversified asset class. So in the 2000s, it was much smaller than the high-yield market. Today, the 2 markets are roughly comparable in size at approximately $1.6 trillion to $1.7 trillion each. And the loan market includes well over 1,000, kind of, below investment-grade issuers across nearly every sector. The market has also changed considerably over the past 20 years aside from just growth. And I'll focus on 2 changes that I believe are impacting market technicals and loan prices. It's documentation and the investor base. So first, on -- loan documentation has weakened over this time. In the early 2000s, nearly every loan that I looked at had a covenant. Today, it's largely the opposite. And that weaker documentation can create challenges for investors and has contributed to lower recoveries in some cases. We believe that the Rockford Tower team is well positioned to identify and underwrite the risks that come with weaker documentation in today's market. And second, the other change that we've noticed is that now CLOs make up the vast majority of the leveraged loan buyer base. 20 years ago, the investor base was much more diversified. But today, CLOs are the majority are the vast majority, and CLOs are governed by a number of tests, which can make certain loans more attractive because they help those tests, while other loans may be less attractive and become effectively orphaned. And that dynamic has really contributed to greater bifurcation and dispersion in loan pricing. And that dispersion creates risks, but it also creates opportunities. And really loan prices reflect both the borrowers' fundamentals and technical factors, including the demand created by CLOs. And really understanding both is key to identifying where the market may be mispricing risk. Kevin Davis: Thank you, Young. That's a nice segue into the next topic. I want to shift our focus to the CLO market. And I have 2 questions for you. What dynamics are you observing in the CLO market? And then we know CLO equity has been under pressure for some time now. How are you viewing the opportunities in CLO equity? And what should investors keep in mind in the current environment? Young Choi: So first, I mean, we see a constructive backdrop for CLO investors and really 3 dynamics are standing out. The first is floating rate income is doing its job. I mean, we appear to be in a higher for longer rate environment and CLO debt has again outperformed fixed rate credit this year. And the long-run numbers are actually striking. By one sell-side tally, CLO AAAs have returned materially more than agency mortgages and investment-grade corporates since 2015 and CLO BBs far more than high yield and loans. The buyer base keeps broadening as well. I know Kim mentioned CLO ETFs, but CLO ETFs have passed $60 billion in assets this year. And we also think that bank and insurance demand is also expected to grow under new capital rules. So that's the first part, like fixed income portion of the CLO market is doing its job. Second is that spreads have widened modestly from the September tights into a heavy year-end supply. So we read that as an opportunity. New issue CLO AAAs are in the 120s over SOFR. BBBs are in the mid-200s to low 300s and BBs are north of 500 now. And so we are effectively being paid more today for the same risk than we were 6 weeks ago. And I would say the third thing is that dispersion is the defining feature of this market and dispersion favors credit pickers. Investors are paying up for clean collateral and for liquid top-tier managers, while mid-tier managers face longer book builds and wider prints. And this is same in the collateral as well. A rising share of loans trading below 80%, software remains under pressure. And so -- but what's exciting is that the gap between top-tier managers and a median manager yield has widened. And so fundamental underwriting of the manager and the portfolio is being rewarded again. Now in terms of CLO equity, the second part of your question, I would say CLO equity has been the weak part of the capital structure. I mean, you've seen it over the course of, let's say, the last 2 years. Sell-side estimates put total equity returns in the negative territory for the year to September with quarterly cash distributions, kind of, the lowest since 2020. And really, there are 2 causes to that. The first is that we've had 2 years of loan repricings where the assets have repriced to tighter and tighter levels. And so you've had a compression in the spreads of the collateral. So that's the first thing. And the second is that this year, in particular, you've also had a lot of loan price volatility that has hit, kind of, net asset values for CLO equity. But we think both are cyclical rather than structural. And both are now, I would say, at least moving in somewhat more of the right direction. The repricing wave that was a headwind has slowed materially. As you've seen loan prices come down somewhat, the amount of loans that are trading above par has fallen from about 40% of the index to the low teens. And so new loans that are coming to the market are being issued at discounts again. And most of the market trades in the 95% to par category rather than north of par. And so there's -- I would say there's more opportunities there. And then in terms of cheaper assets against modestly wider liabilities is the combination that's making new CLO deals and the equity in those deals actually work. The arbitrage has been squeezed for the past 2 years, and it's left fewer third-party buyers of primary equity. And so I would say the economics being offered to minority investors have actually improved materially. And so those enhanced economics lower our cost basis and adds upside. And I think XFLT's flexibility to move across the capital structure and between primary resets and secondary is exactly what's rewarded in this market. Kevin Davis: Young, let's -- one more topic here. Let's touch on interest rates. With rates expected to rise, how are you thinking about the potential impact to XFLT's loan and CLO holdings? And then would this benefit one asset class over another? Young Choi: So loans and CLO debt are both typically floating rate instruments. And so when rates rise, their coupons reset higher. And that can benefit the portfolio's income, although the net effect depends on the increase of the fund's financing costs as well. But because these instruments float, their prices are generally much less sensitive to changes in interest rates than fixed rate bonds. So it isn't so much in the actual dollar price performance of the 2 different asset classes. It should be relatively muted from a straight impact from interest rate changes. The bigger impact really is on the underlying borrowers. So the current rate environment is somewhat different from the spike that we saw in 2022. If you think back then, 3-month SOFR started in the 60 basis point range and rose by more than 450 basis points in about a year's time. That rapid move from a very low base created a major shock to cash flows across the loan market. If you look at the rate market today, rates are just starting from a much higher level and the expected increase, at least from a proportional perspective, is much smaller. So the pressure is less broad-based. But it can be -- it can still be significant for rate-sensitive sectors, particularly businesses tied to large purchases that often require financing, such as homebuilding, building products, autos, et cetera. So for us, really, the focus has been on looking at the individual borrowers and sectors whose business models have a clear exposure to interest rates, whether that may be a positive impact or a negative impact, but really focusing on from a bottoms-up, the individual borrowers and sectors where that exposure exists. Kevin Davis: Thank you, Young. Kim, I want to loop you back in just to wrap us up here. Can you walk us through a trading analysis and cover how XFLT has traded in the secondary market relative to some of its peers? Kimberly Flynn: Sure. So XFLT, this goes in waves in terms of relative secondary market price trading. Right now, XFLT's discount is large, but it's smaller than the peers. We have seen -- in this peer group, it includes most of the market-leading listed closed-end funds that focus on CLO equity. XFLT is built a bit different on purpose to include a mix of loans, which provides ballast. It provides the ability to borrow more cost effectively. So there's a lot of benefits in terms of potential risk reduction with XFLT having the asset mix that it does with a combination of CLO debt, CLO equity and loans. Most of our peer funds have much more significant exposure. Typically, it's 90% allocated to CLO equity, which is the higher-yielding portion of XFLT's portfolio. But in this environment right now has been a contributor to negative performance for some of the peer funds that have significant CLO equity exposure. So we will show you our performance both on a NAV basis and a price basis relative to peers. And I think it's helpful because XFLT is the only -- the fund structured in the way it is with its asset mix. So at times, that makes us look marginally better. But in the context of a dislocated segment of the credit market, we appreciate that this is -- it's still on an absolute basis, we're not happy with the discount. We're working to improve the discount. There has been a widening of both XFLT and the peer group's discounts in the last month. And there are also environments where XFLT will lag behind its peers, both on a NAV and a price basis because the CLO equity is the higher yielding, typically the higher returning part of the portfolio. So we always like to point out these differences. The one element that is helpful in terms of transparency, in addition to having our portfolio manager speak with you about what's going on, on a quarterly basis, this fund, XFLT, is a daily NAV, and we're using independent third-party market pricing. So a lot of CLO investors, to the extent you may be a shareholder in one of the peer funds, we've heard feedback that people like to look at where XFLT is trading from both a price and a NAV perspective because of that increased transparency. Many of the peer funds are doing less frequent NAV strikes. And you can see it in this chart just in terms of the stair step action for some of the peer funds because those are changing. Typically, it's a quarterly with a monthly estimate. And so given our asset mix with a significant loan and CLO debt exposure, since the inception of our fund in September of 2017, we've always provided that daily NAV and that independent pricing. So in good times and in bad times in terms of performance, we want to be transparent. In terms of folks that follow this space, CLO investments are naturally high yielding, and there are a lot of income buyers that look to XFLT and look to the peer funds for that attractive income. And so we just -- we want to be direct with you about where things are today. And to the extent you have any questions about XFLT's portfolio or performance relative to peers, we're happy to seek to address that. There's a lot of fine firms -- this space has actually grown quite a bit over the last 5 years. So we talked about the growth of the ETF part of the market, but there's also been a lot of newer CLO-focused funds to come to market. So we think that's part of a larger evolving trend with people getting more comfortable with CLO investments. And over time, I think that's good for the listed closed-end fund space as this part of the market has expanded. So I think that closes out -- well, let me see. We do have one question. Happy to take questions. Let me see. I think this one, Young, might be, if you're able to tackle it, there's a question that's come in from one of our investors that says, what's the default rate of the CLO portfolio in XFLT? What's the best way to address that, Young? Young Choi: So in terms of the default rate, I think you can look at it in a couple of ways. One is what's the default rate of any of the instruments themselves within the portfolio. The other way to think about it is also what's the default rate of the underlying loans within the CLOs. So at a portfolio level, the CLO tranches that we own, are any of those PIKing or any of those not paying a coupon versus what's in the underlying assets within those CLOs, how many of those assets are actually defaulted. So from a CLO tranche perspective, the equity that we own is, by and large, they're all cash paying. The assets themselves, so the underlying assets within the CLOs, the default rate will be -- I would say it's in line with typically what you're seeing in the market today, which is, kind of, low single-digits type percentage numbers. And so I would say thats the underlying loans are, kind of, exhibiting that type of default today, which is, again, similar to what you see in CLOs is what you're seeing in the broadly syndicated market. Kevin Davis: Thank you for that, Young. I don't see any additional questions, so I'll wrap this here. I do want to thank you both so much for your input and your commentary today. I will remind everyone that the webinar will be available via replay on our website. And as I mentioned at the outset, there's a wealth of information available on our site as well. It's in the Knowledge Bank section. Please reach out if you have any additional needs or questions. We certainly appreciate your time today. Thank you for joining us.