Great Elm Capital Corp. 7.75% Notes Due 2030 Q1 FY2025 earnings call

• Matt Kaplan noted the first quarter was a record-setting quarter with highest total investment income and cash income, driven by CLO JV success and new investments. NII per share doubled, and NII covered the increased distribution. • Keri Davis discussed financial highlights: NII of $4.6 million or $0.40 per share in Q1, net assets $132 million, NAV per share $11.46, asset coverage ratio 163.8%, total debt ~$207 million, $12 million on revolver, cash ~$1.3 million, and a $0.37 per share dividend authorized for Q2. • Mike Keller discussed Specialty Finance: Combined corporate and health care ABL portfolios, rebranded Sterling as Great Elm Commercial Finance, and exited equipment lease holdings, streamlining operations.

Great Elm Capital Corp. achieved a record-setting first quarter in 2025 with total investment income of $12.5 million, the highest in the company's history. NII per share doubled to $0.40 per share from $0.20 in the prior quarter. Net assets as of March 31, 2025, were $132 million, down from $136 million on December 31. NAV per share was $11.46 as of March 31 versus $11.79 as of December 31. The corporate portfolio is nearly $250 million, with first-lien loans comprising 71% of the corporate portfolio as of March 31. The CLO JV had $48 million deployed by March 31.

• Anticipate second quarter NII will exceed first quarter levels. • CLO JV distributions are uneven in early stages but expected to dampen over time as scale is leveraged. • Reiterate reviewing GECC on a 4-quarter basis rather than quarter-to-quarter. • Confident in covering dividend in 2025 and generating sustainable returns.

• Market volatility led to unrealized losses on portfolio investments, including CLO JV equity and CoreWeave investment. • Uncertainty from tariffs and government initiatives, with limited direct exposure but considering second and third-order effects. • Economic uncertainty from potential recession and its severity, factored into portfolio reviews and new underwriting.

Q: How do you see the portfolio and the funds NAV performing with both the broadly syndicated loan market and private credit spreads widening in April?

A: Matt Kaplan said there were modest markdowns in the portfolio, but the portfolio is healthy with minimal NAV impact from unrealized losses. CLOs are relatively young and well-positioned, and CoreWeave investment's impact is volatile but confidence in the company remains.

Q: Curious if you could provide a little color into the timing of the new deployments and the monetizations you had in the quarters based on the incoming yields being significantly higher than the outgoing yield, it seems like there should be some benefit to the overall portfolio. So curious how much of that was actually reflected in the first quarter. And if there may be some benefit in 2Q as well?

A: Matt Kaplan said it was a bit barbelled with excess cash and commitments closed in January, February being low, and expecting some benefit in Q2.

Q: What's your expected ROE on that CLO investment? We are targeting, call it, high teens to 20% returns over IRRs on our dollars in. And is that before fees, do you take any fees out at the joint venture level?

A: Matt Kaplan said there's no management fee or specific fees taken out at the JV level, and the expected TII return from the JV is in the high teens to 20% range.