In conclusion, we remain positive about the company’s outlook given our healthy and defensive portfolio positioning with portfolio company earnings growth outpacing the broader direct lending market, ample dry powder to deploy into a large opportunity set, and continued elevated earnings power along with low cost financing sources, all of which is backed by Blackstone’s platform advantage providing for premier sourcing resources and an infrastructure built to protect investors capital. With that, I’ll ask the operator to open it up for questions. Thank you.
Operator: Thank you. [Operator Instructions] We’ll go first to Finian O’Shea with Wells Fargo.
Finian O’Shea: Hi everyone. Thanks. Good morning. Just housekeeping question, did the fee waiver lapse pursuant to the 2-year anniversary last week or so?
Teddy Desloge: Yes. Hey, Fin, this is Teddy. Yes, the fee waiver ended October 28, 2023.
Finian O’Shea: Okay, great. Thank you. And a question on leverage, Brad, you mentioned it’s still within your target range, but it’s obviously come down some this year and that has an impact on returns. So we are seeing how you feel about the pipeline as you see it today, and if we could expect to see this come off the low end or if we need a real market come back to see that?
Teddy Desloge: Thanks Fin. Just to follow my comments, the pipeline has picked up quite a bit and you saw that in the third quarter with our commitments being $650 million or so and in the fourth quarter, just from the overall Blackstone credit pipeline standpoint is probably the busiest we have seen it all year. And I think that’s just indicative of little bit more of an active M&A market, but also existing portfolio of companies looking to do more things, whether it’s add-on financings, whether it’s recapitalization. So, I would expect Fin, you can never perfectly time deals, which is always the tricky thing, which is why we give a range. As we get towards the end of the year, you could see us get a little bit higher than where we are today.
Finian O’Shea: Awesome. Thank you. And if I could sneak in a third, I appreciated Jon’s color on the amendments that which none came from covenant or PIK relief. I was curious if anyone asked for covenant or PIK relief?
Jon Bock: No, Fin. They didn’t.
Finian O’Shea: Awesome. Thanks so much.
Operator: We will go next to Robert Dodd with Raymond James.
Robert Dodd: Hi, and congrats on the quarter. On kind of the pipeline and to your point, but I mean, the commitments in Q3, versus if we look back over the last multiple quarters, the gap between commitments and fundings was much more substantial than normal. Can you give us any color on that to your point? Was that DBTLs that, people are looking to start making acquisitions and setting up the financing first, or can you give us any color on what was the reason for the large spread there and should we expect that to be recurring going forward?
Brad Marshall: Just timing. So actually, a handful of those have already funded in the fourth quarter. So we just made the commitments towards the end of the third quarter, it usually takes 30 to 60 days for some of these deals to close. So that’s all, that’s the gap in the number, Robert.
Robert Dodd: Got it, got it. Thank you. And then as we look to next year, I mean your focus obviously, I mean as you’ve maintained all time. Firstly, do you expect to see some structural changes in kind of the deals getting done with rates being elevated in terms of maybe seeing lower leverage on a first line? Maybe you’re not doing the whole stack with somebody coming in behind, who’s willing to take a bit of – a bit more risk than you’re willing to do because obviously I mean on some of the large first line unit tranches, if it’s at 6x with makes where they or 8x whatever it is versus, do you expect to kind of the market to shift in terms of how some of the leverage is structured as we go through next year, if it’s more active with rates being so elevated.
