Golub Capital BDC (NASDAQ:GBDC) Q3 2020 Earnings Call

0:00 Welcome to GBDC's June 30, 2020 quarterly earnings conference call. Before we begin, I would like to take a moment to remind our listeners that remarks made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation and Reform Act of 1995. Other than statements of historical facts, may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in GBDC's filings with the SEC. For materials the company intends to refer to on today's earnings conference call, Please visit the investor resources tab on the homepage of the company's website, www.golubcapitalbdc.com, and click on the events slash presentations link.

0:59 GBDC's earnings release is also available on the company's website in the investor resources section. As a reminder, this call has been recorded for replay purposes. I will now turn the call over to David Golub, Chief Executive Officer of Golub Capital BDC.

1:15 Thank you, Ingrid. Hello, everybody, and thanks for joining us. I'm joined virtually today by Ross Tooney, our Chief Financial Officer, and Greg Robbins and John Simmons, both Managing Directors at Golub Capital. We and the rest of the Golub Capital team hope that you and your loved ones are all safe in these challenging times. This morning, we issued our earnings press release for the quarter ended June 30th, and we posted an earnings presentation on our website. We'll be referring to that presentation throughout today's call. Let me start with two headlines. The first headline is that GBDC's results for fiscal Q3 were consistent with the estimates we filed on July 15th. Adjusted net investment income per share was 28 cents, adjusted EPS was 94 cents, and NAV per share was $14.05.

2:02 The second headline is that our fiscal Q3 results were strong. The portfolio generated solid adjusted net investment income, and demonstrated strong, resilient credit results, including the reversal of a meaningful portion of the unrealized losses that depressed performance in fiscal Q2. I'm going to start by reviewing key performance drivers for fiscal Q3, and then I'm going to go through GBDC's results for the quarter in detail with a lot of help from my colleagues on the phone. After that, we'll take your questions. On slide six, we've outlined three themes beyond good underwriting that we believe drove GBDC's strong fiscal third quarter. First, the U.S. economy began reopening sooner than expected. Second, GBDC's portfolio companies generally performed better than expected, especially the ones in COVID-impacted subsectors.

2:54 And third, our private equity sponsors have generally stepped up to support their portfolio companies. Let me elaborate on each of these three. Thank you for joining us. But we believe the earlier reopening gave a substantial boost to many borrowers in GBDC's portfolio. Second theme, within GBDC's portfolio in general, borrowers perform better than expected, especially those in COVID impacted subsectors.

3:47 You'll recall from our fiscal second quarter earnings presentation that we focused on five industry subsectors where we saw more risk of COVID impact. restaurants, dental care, eye care, fitness franchises, and retail. In fiscal Q3, we're encouraged to see that many of GBDC's obligors in these industry subsectors perform better than expected. In general, most of GBDC's restaurant and retail obligors found ways to stay open, to cut costs, to pivot, to emphasize takeout, delivery, curbside, or Internet-based models. Some of the obligors in these industry subsectors actually posted same-store sales gains during the quarter. And our dental and eye care obligors, who were closed for a period of time, have also in general opened stronger and better than we expected.

4:38 Third theme, our private equity sponsors are generally stepping up to support their portfolio companies. We worried in March and April at the beginning of COVID that sponsors would have so many problem children that they wouldn't have Thank you for joining us. On the right-hand side of slide six, we've highlighted four impacts on GBDC that we'll discuss further over the course of today's presentation.

5:29 Let's start with the first of those impacts, improved internal performance ratings for the GBDC portfolio as a whole. Please turn to slide seven. You'll recall we highlighted in last quarter's earnings presentation the downward migration in our internal performance ratings from categories four and five. Those are loans that are performing at or better than expectations at underwriting. to Category 3, which are loans that are performing or expected to perform below expectations. Category 3 increased from 7.2% of the portfolio at fair value at December 31 to 26.5% of the portfolio at March 31. The percentage of the portfolio performing materially below expectations in Categories 1 and 2 was essentially unchanged in the March 31 quarter.

6:17 In the quarter ended June 30th, Consistent with borrowers performing better than our expectations, we saw improved performance ratings. Specifically, we saw loans in Categories 4 and 5 increase from 71.5% of the portfolio at fair value at March 31 to 76% of the portfolio at June 30. Category 3 loans went down from 26.5% of the portfolio at March 31 to 22.3% of the portfolio at June 30. Even better, the percentage of the portfolio in categories 1 and 2, those are loans performing materially below expectations, decreased. While the improvement in risk ratings is encouraging, I don't want to gloss over the fact that the proportion of the portfolio rated 3 is still higher than the range we typically saw pre-COVID. But I want to put that difference in context.

7:11 Given today's unusually uncertain environment, we're quick to downgrade loans to category 3. When a loan migrates to Category 3, it automatically triggers an increased level of scrutiny and oversight. Our approach is designed to take full advantage of the breadth and depth of resources of the Golub Capital platform. Category 3 doesn't mean defaults or losses are necessarily going to occur, case in point being the material subset of GBDC's loans rated 3 in the March 31 quarter that migrated this quarter up to Categories 4 and 5. We've always believed that early identification of problems or potential problems leads to better outcomes down the road. Let's continue our discussion of how the key themes we highlighted earlier impacted GBDC's fiscal Q3 results.

7:58 We mentioned that new non-accruals remained low. We'll come back to that point in our usual discussion of GBDC's financial results. But in brief, non-accruals as a percentage of total investments at fair value increased modestly to 2%. Net realized losses also remain low, and we saw a reversal in net unrealized losses. You can see both the low net realized losses and the high unrealized gains in the NAV bridge on slide eight. We start with March 31 NAV per share of 1349. That's pro forma for the dilution from the rights offering. From there, we add adjusted NII of 28 cents per share. We deduct our dividend of 29 cents per share, and you can see in the next column that Realized credit losses during the quarter were very low at 3 cents per share.

8:47 The big driver of the improvement in NAP per share was net unrealized gains. Net unrealized gains of 74 cents per share in fiscal Q3 reversed a meaningful amount of the net unrealized loss in fiscal Q2. Now, we continue to see our job as being all about minimizing realized losses and generating more of these unrealized losses. I want to spend a little time on this call describing our approach for this task. And to do that, let me hand the microphone to Greg Robbins, who's going to offer us an update. Thank you, David.

9:25 Let's start by reviewing GBDC's strategic response to COVID-19 on slide 10. Last time, we talked about three key goals GBDC has pursued while navigating the COVID-19 crisis. First, proactively managing its highly diversified Thank you for joining us. Slide 11 shows the overall composition of GBDC's portfolio as of June 30th.

10:14 The data on the left shows that GBDC's portfolio remains large, diversified, granular, and focused at the top of the capital structure. The portfolio has over 250 investments with an average investment size of less than 40 basis points of the portfolio at fair value. On the right, you can see that GBDC's portfolio was designed to be resilient. We've focused since inception on lending to companies we believe will retain value, even in a downside recession scenario. In most cases, these borrowers are also COVID-19 resistant. Over 80% of the portfolio on June 30th consisted of investments in industries we believe are relatively insulated from COVID-19, areas like enterprise software, business services, financial services, and more. By the same token, less than 1% of the portfolio consisted of investments in sectors we know have been particularly hard hit by COVID-19, like airlines, entertainment, hotels, energy, and others.

11:21 Most of our proactive portfolio management has focused on the roughly 20% of the portfolio in industry subsectors we identified as less insulated from COVID-19. Turning to slide 12, you will recall that we described a three-part strategy for proactive portfolio management. First, gather information. Second, develop strategic plans. And third, execute those strategic plans. Over the period since March, we first gathered information and dealt with our most impacted borrowers. We're now in phase three of our strategy, and we are implementing game plans for each borrower working with sponsors, management teams, and junior capital lenders. This strategy has also and already produced meaningful results.

12:10 Our team has executed more than 50 credit-enhancing amendments. We define credit-enhancing as any amendment involving a pricing increase, improved documentation terms, or an incremental equity infusion by the sponsor. Our proactive engagement with sponsors and their encouraging degree of support for their portfolio companies meant that we had only one default on principal and interest payments in the quarter. Slide 13 provides two illustrative examples of the types of credit enhancing activities we've completed and expect to complete in the coming months. Slide 14 shows how GBDC has fortified its balance sheet. On June 30th, GAAP leverage was 0.86 times which is at the low end of our target range, regulatory leverage was less than 0.75 times.

13:03 GBDC had $435 million of liquidity in the form of cash and borrowing capacity at quarter end. GBDC also took steps to optimize its debt capital structure. We amended the Morgan Stanley Credit Facility in late June to increase long-term borrowing capacity from $200 million to $400 million. We also fully repaid and terminated the two SLF credit facilities with Wells Fargo that were in wind down. And finally, we priced a new low-cost $300 million CLO last week. As a result of these initiatives, GBDC has substantial flexibility in firepower. This flexibility in firepower puts GBDC in a great position to capitalize on attractive opportunities.

13:52 As illustrated on slide 15, Leverage levels decreased dramatically after the global financial crisis, and Golub Capital was able to capitalize significantly on those opportunities. We believe recent market events will likely lead to a sustained lender-friendly environment, much like we saw from the last recession. Lower leverage, higher spreads, improved covenants, and enhanced downside protection are components of what we expect to see come out of the current market environment. and as we've discussed in prior quarters and illustrated on slide 16, we believe GBDC has powerful competitive advantages, which will help us deliver premium shareholder returns going forward. So with that, let me hand it over to John Simmons to go through our financial results for the quarter ended June 30th and more detail.

14:41 John?

14:43 Thanks, Gregory. As a reminder, please note that in addition to the GAAP financial measures in the investor presentation, We've also provided certain non-GAAP financial measures. These non-GAAP measures, which we refer to as adjusted measures, seek to strip out the impact of the GCIC merger-related purchase premium write-off and amortization. They're further described in the appendix of the earnings presentation. We'll refer to them throughout the conference call where appropriate, as we think they're better indicators of our performance and are consistent with how we evaluate our results. With that, let's turn to slide 18 to look at the results for the quarter in more detail, and I'm going to talk about the column on the right-hand side of the page. Adjusted net investment income per share, or as we call it, income before credit losses for the June 30th quarter was 28 cents, consistent with our expectations and in line with our quarterly dividend.

15:40 Adjusted net realized and unrealized gain per share was 66 cents. This compares to adjusted net realized and unrealized loss per share of $2.04 for the March quarter. The adjusted net realized and unrealized gain this quarter was primarily driven by the reversal of unrealized losses recorded in the prior quarter for the reasons that David mentioned in his opening remarks. Adjusted earnings per share for the June quarter was $0.94 per share. This compares to an adjusted loss per share for the March quarter of $1.71. Our adjusted net asset value per share at June 30th was $14.05, which factors in the earnings in excess of our dividend this quarter, offset by the dilution from the rights offering. On June 29th, we paid a quarterly distribution of $0.29 per share. And finally, on August 4th, 2020, our board declared a quarterly distribution of $0.29 per share, payable on September 29th, 2020, to shareholders of record as of September 8, 2020.

16:46 The distribution is consistent with our historical dividend approach of seeking to pay distributions at an annualized rate of approximately 8% of NAV. With that, I'll hand the call over to Ross to go through the quarterly results in more detail. Ross?

17:04 Great. Thanks, John. Turning to slide 19, this slide highlights our total originations. 15.7 million in total exits and sales of investments of 88.4 million for the quarter ended June 30th. Factoring in unrealized appreciation and other portfolio activity, total investments at fair value increased by 1% or 40.2 million. As of June 30th, we had 28.3 million of undrawn revolver commitments and 80.9 million of undrawn commitments on delayed draw term loans. These unfunded commitments are relatively small in the overall context of GBDC's balance sheet and liquidity position. As shown at the bottom of the table, the weighted average rate of 7.5% on new investments and the weighted average spread over LIBOR on new floating rate investments of 6.3% both increased from the prior quarter.

17:59 As a reminder, the weighted average interest rate on new investments is based on the contractual interest rate at the time of funding. For variable rate loans, the contractual rate would be calculated using current LIBOR, the spread over LIBOR, and the impact of any LIBOR floor. The top of slide 20 shows that GBDC's portfolio remained highly diversified by obligor, with an average investment size of less than 40 basis points. The bottom of the slide shows that our overall portfolio mix by investment type has remained consistent quarter over quarter, with one-stop loans continuing to represent our largest investment category at 83%. Turn to slide 21, 97% of our investment portfolio remains in first lien senior secured floating rate loans and defensively positioned in what we believe to be resilient industries.

18:52 Turn to slide 22, the graph summarizes portfolio yield and net investment spreads for the quarter. Focusing first on the light blue line, this line represents the income yield, or the actual amount earned on the investments, including interest and fee income, but excluding the amortization of upfront origination fees and purchase price premium. The income yield decreased modestly by 10 basis points to 7.7% for the quarter, primarily due to the continued decline in LIBOR. The investment Thank you very much. A weighted average cost of debt for the aqua blue line decreased by 50 basis points to 3.2%.

20:00 As a result, our net investment spread, the green line, which is the difference between the investment income yield and the weighted average cost of debt, increased by a net 40 basis points to 4.9%. Looking to the next two slides, non-accrual investments as a percentage of total debt investments at cost and fair value remained low but increased modestly to 2.8% and 2% respectively as of June 30th. During the quarter, the number of non-accrual investments remained at 10 as the disposition of two non-accrual investments were offset by the addition of two investments to non-accrual. As David discussed in his open commentary, as a result of stronger portfolio company performance, the percentage of investments rated 3 on our internal performance rating scale decreased to 22.3% of the portfolio at fair value as of June 30th.

20:56 As a reminder, independent valuation firms value at least 25% of our investments each quarter. For the quarter ended June 30th, the total percentage of portfolio company investments valued by the independent valuation firms was over 30%. Slides 25 and 26 provide further details in our balance sheet and income statement as of and for the three months ended June 30th. Turn to slide 27, the graph on the top summarizes our quarterly returns and equity over the past five years, and the graph on the bottom summarizes our regular quarterly distributions as well as our special distributions over the same timeframe. Turning to slide eight, this graph illustrates our long history of strong shareholder returns since our IPO.

21:44 The next slide summarizes our liquidity and investment capacity as of June 30th in the form of restricted and unrestricted cash, availability on our revolving credit facilities, and the ventures available through our SBIC subsidiaries. As Gregory just previously highlighted, we made some enhancements to our liability structure during the quarter. which included an amendment to the Morgan Stanley revolving credit facility which increased the borrowing capacity through the full term of the credit facility from $200 million to $400 million. In addition, we repaid and terminated the two SLF credit facilities which were past the reinvestment periods and significantly under-levered. Slide 30 summarizes the terms of our debt facilities as of June 30th as well as our focus on diversified, long-term, and stable sources of debt capital.

22:35 With that, I'll turn it back to David for some closing remarks.

22:39 Thanks, Ross. So to sum up, GBDC had a strong fiscal Q3. Net investment income was solid, and we made good progress executing on our post-COVID strategy. Before we turn to Q&A, I do want to be clear in saying that while we saw encouraging signs in the fiscal third quarter, we think this COVID bus trip still has a ways to go. We're worried about elevated case counts in We're paying careful attention to the potential indirect effects of COVID, particularly in the form of changes in consumer spending and business investment. The message we want to leave you with today is that we've taken prudent steps to prepare GBDC for a wide range of potential scenarios.

23:26 We've got a solid strategy. We've got a fortress balance sheet. and we've got access to the competitive advantages of the Golub Capital platform. As a result, we think GBDC is very well positioned. With that, let's open the line for questions. Thank you. If you would like to register a question, please press the 1 followed by the 4 on your telephone. You'll hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the 1 followed by the 3. One moment please for the first question. Our first question comes from a line of Finian O'Shea with Wells Fargo, who's with the question.

24:08 Hi, good afternoon. Thanks for taking my question. David, first, to start with the dividend payout, looking at the model here, there's, of course, a few moving parts, but it looks like the way things will settle that, you know, on next quarter's equity base, that the, you know, hurdle will no longer exist. support the payout threshold so you'd have to go through the dividend. And that could change if you recoup some unrealized losses. Correct me if I'm wrong thinking about all this, but how do you anticipate your road to dividend coverage on the $0.29 level as the Thank you for joining us.

25:29 Thank you for joining us. Thank you very much.

26:29 Can you give, you know, in terms of going on offense, you know, appreciated all the color you provided on your COVID exposed book and your handling of that. Obviously, you're in a pretty favorable position. Originations were understandably light this quarter. But assuming that, you know, right now and going forward, you're out there looking at the market. So just any high level color on offense. What you're seeing is the pipeline building back up and how we should think about the opportunity and origination for you guys.

27:09 So short answer is yes, we're seeing green shoots in the M&A market and that is leading us to be somewhat more optimistic about the prospects for increased originations in coming months. As we discussed last quarter, The early reaction to COVID-based uncertainty was a near shutdown of the M&A market. It's not surprising. Buyers and sellers couldn't agree on value in the context of uncertainties that were in the market. Sellers chose not to bring companies for sale unless they had really strong reasons to do so.

27:56 With the Thank you for joining us. As we look at the quality of these opportunities, we're seeing that the pattern Gregory alluded to in the call is holding, which is to say post a dislocation, we tend to see opportunities that offer some combination of lower leverage, better documentation terms, and higher spreads.

28:46 And I think that's what we're seeing now.

28:53 Okay. helpful and that's all for me for now. Thank you. Our next question comes from a line of Ryan Lynch with KBW. He's busy with a question.

29:07 Hey, good afternoon and thanks for taking my questions. First one, kind of following up on that market and environment question, you have slide 15 that shows a good indication of how Leverage levels went, you know, coming out of the last recession. I'm just wondering if you think that this one could be potentially different, just given that there's so little deal activity going on today, potentially because of this sudden economic shutdown. And then at some point, the recovery... could come on and accelerate at a pretty quick pace. Once we do fully open up, we obviously don't know when that could occur.

29:55 Versus the other downturn, it feels like a little bit of a slower recovery over multiple years, had really good terms and structures and covenants for multiple years. I'm just wondering if you think that this recovery from this downturn could play out or will play out differently than the last one.

30:15 So great question, Ryan, and it's a $64,000 question. I don't think anybody really knows the answer with confidence to that. Let me give you a couple of observations. One is it's a very rare downturn or dislocation that doesn't lead to a period of improved lending opportunities. So I think it's highly likely that we'll see an environment that's attractive for lenders going forward. The The question is, how attractive and how long will it last? Now let's zone in on what are the key factors that are going to impact how attractive and how long it will last. One of those factors is the unprecedented amount of private equity dry powder that's available out in the marketplace right now.

31:08 It is not only at record levels, but it is right now not being utilized at a pace that would be consistent with all of it being deployed. Again, if history is a good guide, and I think in this sense it probably will be, that argues for an acceleration of private equity capital deployment once the COVID-related uncertainties ease a bit further. A third factor supporting the idea that we're going to see Thank you for joining us. I'm not telling you, Ryan, that I think for sure this downturn is going to look like 2008-9. I don't know.

32:20 What I can tell you is I think this recovery is likely to take some time due to very high unemployment rates and at some point in the reasonably near future reductions in government spending. But But this is an unprecedented period. No one's lived through a global pandemic like this before and seen this kind of government response. So we all need to plan for a variety of different scenarios. One of the themes you've heard me talk about a lot since COVID began is our emphasis on exactly that, on planning for a number of different scenarios.

33:05 Okay. Yeah, that makes sense. GBDC has primarily been known as a first lien, top of the capital structure type of lender. But when you were running private credit funds coming out of the previous downturn, you guys, out of the recovery phase of the prior downturn, were willing to do more junior capital as that market became more attractive. I would assume we're probably too early in the recovery phase for GBC to be considering that strategy. But is that something or can you give me some commentary on your willingness to pursue that strategy at all further coming out of this downturn in GBC if the opportunity arises?

33:57 Well, you said two things there. So let me see if I can parse it a little bit. Do I think that in the near term that Golub Capital BDC is going to change its core strategy away from senior debt, first lien debt, toward junior debt? The answer to that is no. I think it's highly likely that we're going to sustain our focus on first lien and one stops. Second part of the question was, would we ever consider... Thank you very much.

34:59 Post the equity raise, your balance sheet seems to be in really good shape. You guys have a lot of dry powder. That said, are you guys considering, are you guys evaluating changing your liability structure at all, principally pursuing a portion of it in unsecured debt going forward?

35:27 Sure. So I give an answer similar to the answer I gave last quarter on this. We've said on a number of prior earnings calls that we're big believers in the benefits of unsecured debt, and we think that it makes sense to add a layer of unsecured debt into GBDC's liability structure over time. As you pointed out, we have the luxury right now of a lot of liquidity, so we're in no rush. We've Those are all my questions. I appreciate the time this afternoon. Our next question comes from the line of Robert Dodd with Raymond James.

36:30 Please proceed with your question.

36:32 Hi, guys. Yeah, Ryan just partly asked what I'm on, so I'll expand it a little bit. I mean, to that point, my portfolio looks to be in good shape given the environment we're in. So looking at the liability side, and I appreciate the answer you just gave, David, but when I look to – David Golub, Stefano Robertson,

37:18 The question is not, can we, or The question is, what's the optimal capital structure for GBDC? And the tricky piece here is that the timing of unsecured issuance is surprisingly important. This is long-term fixed-rate debt, and pricing on it has changed very dramatically just in the last couple months. So we want to be very smart about how we do it.

38:12 As you know, last week we priced a new securitization for DDC. The pricing on that was a new post-COVID low for securitization financing. Our AAAs were LIBOR plus 235. So one of the ways we've made money for shareholders over time is by keeping our liability costs very low. And we're intent on accomplishing two goals simultaneously. One is adding unsecured to the stack, and the second is maintaining very low liability costs.

38:49 That's completely fair, and yes, the CLO prices just look quite attractive. I mean, the other part obviously ties into it is having underutilized. If you do add unsecured, and then you have four credit facility revolvers that end up underutilized, those become a little expensive to your point that you just terminated the two SLFs because they weren't efficient anymore. So from that perspective, I mean, would you expect to continue running four credit facilities if and when unsecured gets added to the stack? Anything, any color on that about what the optimum number or size of Thank you for joining us.

40:02 You talked about green shoots starting to emerge for deployments. You've got plenty of liquidity right now. Are you mostly looking at add-on acquisitions, potentially platform acquisitions? Because obviously an add-on, maybe the due diligence is easier in a in an environment where I certainly haven't gone on a plane since March versus an add-on where the due diligence may need to be more expansive in nature and may require travel. Can you give us any color on the type, how the due diligence is being done, etc.?

40:47 Yeah, it's a very good question. So let's just broaden your question and talk about what's the deal environment of the future going to look like First, let's contextualize. If we look at the past for Golub Capital BDC, and I don't think we're terribly different from Ares or some of the other very large platforms, about half of our deal activity has historically been with existing borrowers. You're 100% right that if you think about doing deals in the COVID era, it's a lot easier to and many more. Having said that, I think that creates a new source of competitive advantage for dominant players like us.

42:19 We have the really close relationships that you would want to have with the top sponsors in this environment. We have deep industry knowledge and domain expertise in a number of areas, including software, including franchising businesses, including some parts of healthcare that are particularly attractive in this post-COVID world. So I think your question is a really good question, Robert. I think Thank you very much.

43:18 Hey, I just had one more question. I know historically you guys have never really used unsecured debt on your balance sheet, but David, you mentioned you were never against it. You were always willing to utilize that at the right time. I'm just curious, why was there never either the desire or the ability to to get an investment grade rating from one of the major rating agencies just to have that on file in case you guys did look to if the markets became attractive enough that you guys could pursue that a little bit easier given you guys have a great historical track record, a defensively positioned portfolio.

44:03 Why was that rating never pursued or achieved in the past? I I don't want to spend a lot of time going into the past other than to tell you that we did look into unsecured offerings in great depth, including being in discussions with rating agencies. So I don't think your premise is correct, that it's something that we didn't or couldn't do. But I think the key point is we are where we are. So we are in a I think we're in a very strong position. We've got a lot of liquidity, and we've got the opportunity, if it makes sense, to pursue an unsecured offering prospectively.

44:59 Okay. Thanks for the follow-up. Mr. Golub, there are no further questions at this time. I will now turn the call back to you.

45:10 Thank you, Ingrid. So once again, thank you to all of you for joining us today. Really appreciate your attention and interest and your partnership. And as always, if you have any questions that were not addressed today or that you come up with post today's call, please feel free to reach out. In the meantime, I look forward to speaking with you all next quarter. That does conclude the conference call for today. We thank you for your participation. Now, please disconnect your line.