So I think we’ve got conditions that support the growth of the business and support the insurance industry through the interest rate process. Like I said, they haven’t had a need to borrow, but we know in the municipality world, it’s not a matter of if, it’s only a matter of when and when is coming. And because of the higher rates, we think we’re in great shape to make significant production gains across the board. Spreads, a question of, the market tend to be a little bit volatile. They’re a little tight now, but we expect them to widen out as well, which will further benefit production. So I think it’s a tale of two stories. The interest rate environment helps, but the issuance market is lower because of the cash that came out of the pandemic release as well as the fact that people are looking for better rates to finance.
Geoffrey Dunn: And if I remember, we were seeing change penetration rate two years ago and now you — I think you said 8.5 year-to-date?
Dominic Frederico: Right, and like I said, if you break it down between the where we’re actually strong in the marketplace in the A and the BBB. So to give you another statistic, I told you, 84.7% of BBB transaction scrapped insurance, 59.5% of the A transaction scrap insurance. So think of it both in the BBB and A space well over 50% penetration rates, which is what I had predicted 1,000 years ago based on penetration rates that I expect based on us being AA rating and what’s available in the market. And also, the fact that we’re in the other two markets of structured finance and international infrastructure really provides us further support and a little stability in the earnings that we can see and the production that we can make. And of course, as you know, the returns on those businesses are even higher — significantly higher than the domestic public finance business.
Geoffrey Dunn: And then one last follow-up, given what you just said about BBB and A penetration, you also indicated that you’re gaining traction in AA. So is your view that it’s an 8% to 10% type of penetration rate? Or is it still — I think years ago, we talked about maybe recovering at 15%. What’s your view on the ultimate penetration?
Dominic Frederico: I still think we can get to 50% of the 50%, which is 25%. That’s my view, and I still stick to it. And as I said, if I look at the BBB and the A penetration, we’re there, we just need to get more participation than AA. Now I think we’ll get to the numbers. So I think easily over 10% in a normalized marketplace. If we continue to see high interest rates and spreads wide now that penetration rate will grow as well.
Geoffrey Dunn: Okay, thank you.
Dominic Frederico: Thanks, Geoff.
Operator: This concludes the question-and-answer session. I would now like to turn the conference back over to our host, Robert Tucker for closing remarks.
Robert Tucker: Thank you, operator. I’d like to thank everyone for joining us on today’s call. If you have additional questions, please feel free to give us a call. Thank you very much.
Operator: This concludes today’s conference call. Thank you all for attending. You may now disconnect your lines and have a great day.
