Stephen Laws: Hi, good morning. Tony, I wanted to start with a question on the numbers. I think you’re on the positive side, you mentioned some of the resolutions, I believe in Q1 and expect Q1 and Q2 will help remove some drag off the financing of non-accrual assets. And then around the downgrades, I think you mentioned that seven of those are new non-accrual loans. Can you talk about the net impact and how we should see those two things balance out in the near-term?
Anthony Marone: Sure. So, as we’re resolving some of these, we’re, without getting into specific guidance on next quarter, in particular. I think you could expect to see a similar impact from moving loans to cost recovery as we’ve seen in the past. So, given the magnitude of that portfolio, that you can think of that as something in that $0.08 to $0.10 range is something that that you might expect. And then on the resolutions, those will be that will be dependent on how much leverage we have against them. So, it’ll be a more muted impact and maybe a couple of cents per share. I think, importantly, I mentioned in my remarks, when you’re thinking about the earnings, impact of loans going to cost recovery, many of these loans in particular, some of the more recently impaired loans continue to pay, so we’re still getting that cash flow and it’s benefiting our basis, even though it’s not coming through our DE [ph] metrics.
Stephen Laws: Great. Appreciate the clarification there. And then I know you’ve mentioned kind of one outlook for expectation for one resolution here and Q2, but as you look over the balance of the year, and you consider the current [Indiscernible] loans for those specific reserves, how much of that — I think it was $1.2 billion, maybe that was office, but how much of that do you think you can get resolved this calendar year? And how do we think about resolutions in the second half?
Katie Keenan: Yes, it’s a great question. I think from a general overall market perspective, we are very focused on taking advantage of the fact that there is more liquidity more transparency in the market. There’s capital coming back, including for office. Obviously, it’s one of the loans we resolved this quarter, or two of the loans, we resolved this quarter from a sale and restructuring perspective, were both office loans, we also took one REO. And our overall approach is going to be one of maximizing recovery for our investors. But where we see the opportunity to sell or move on from an asset in a level that makes sense when we look at our whole sell analysis from a return perspective, we are absolutely going to do that.
And I think that the fact that there is more liquidity in the market, more turnover, more stuff is moving, it’s going to create some noise, but it’s ultimately the best thing in order to move us through this cycle and get to the other side, get back focused on our core business. So, we have a couple of others that are in process relatively near term, where obviously, all systems go in terms of trying to make sure we resolve these things as soon as possible. So, I think it’s tough to project for the second half of the year, but we’re very focused on moving these assets to resolution and getting through it.
Stephen Laws: Great. Appreciate the comments this morning. Thank you.
Operator: We’ll go next to Sarah Barcomb with BTIG.
Sarah Barcomb : Hi, good morning everyone. My question is related to leverage on watch list assets. Could you walk me through some of the resolutions of the five rated assets that were in CLOs? Meaning was there an additional cash need to avoid losses at the CLO level when those resolution proceeds came in? And approximately how much leverage is on the new five-rated assets? Thank you.
Katie Keenan : Sure. So, thinking about our general approach there, for most of the five-rated assets, we generally have delevered them along the way. So the typical advance rate on a five-rated asset is materially lower than our overall portfolio. So usually we’ve already sort of put ourselves into a more stable position. On the CLO specifically, when we look at these assets, we’re really looking at optimizing recovery and return for our investors and for all of our investors throughout the capital structure. Sometimes that will involve buying portions of the loan out of the CLO or in some cases, all of the loans out of CLOs. And in other cases, we’ll look at it and say, you know, the best thing really is to continue with an asset in the CLO.
And it’s really going to come down to a decision looking at all of the factors to maximize the outcome for the overall company. So in terms of capital, you’ve really seen for the most part, along the way impact with these loans, because obviously, impaired assets, they’re on the watch list for a while. We know what’s going on. We’re talking to our lenders. This is not something that is happening overnight. So we don’t see a material change in liquidity, and it’s really just about making sure each one of these assets is optimally capitalized to maximize sort of the return and recovery value as we move through our business plan.
Sarah Barcomb : Okay, thank you. And then just a quick modeling question. So you mentioned you are expecting one more resolution in the second quarter. Are you still expecting about $70 million to $80 million total realized losses for the first half of this year? And how are those expectations shaping up for the full year?
Anthony Marone: I would stick with that expectation. As I mentioned in our remarks, the losses between the first and second quarter are coming in right on top of our year-end CECL reserves, which we think is a great validation of our valuation process. So I would stick to that expectation. As it relates to the back half of the year, I think Katie covered that earlier, that it’s going to be very dependent on what kind of transactions that we see in the market, what kind of liquidity there is. So I don’t know if there’s a specific number that I would focus on at this point.
Sarah Barcomb : Okay. Thank you.
Operator: We’ll go next to Jade Rahmani with KBW.
