Brian Gerson: Hey, Dan. The one thing I’d add to this, Ken, it’s Brian, is that in situations like this, time is not always your friend. So I think our approach to sort of address things quickly and deliberately is really important. Because sometimes, we never believe in kicking the can down the road because situations get worse, not better in those circumstances. So we want to drive to a resolution. Clearly, we do prefer the sponsor to support, continue to support their portfolio companies, and they often do. But when they don’t, we just don’t want to close our eyes and hope for the best. We need to be getting in there and preparing to maximize value for our investors.
Operator: Our next question comes from Bryce Rowe with B Riley. Bryce, go ahead with your question.
Bryce Rowe: I want to kind of ditto some of the comments around the information around the restructurings, resolutions, super helpful, and certainly pleasantly surprised to see the pace at which you made those happen. Maybe shifting to the capital structure, and might’ve talked about this in past calls, but Steven, maybe you could speak to the opportunity to refinance or at least address some of the maturities you have coming up in ’24 and ’25, especially in light of how open the debt capital markets are today. Thanks.
Steven Lilly: Bryce, thanks for the question. I think from our perspective, we took care of our July maturity last fall when we issued 400 million of unsecured notes. And certainly agree with your point, the markets are open and appear to be active. So, yes, that’s certainly a good thing. I think we’ll evaluate things in the normal course as — we’ve been a frequent issuer. I think we’ll continue to be over time and certainly getting, having a very nice start to the year like this quarter has been a very clean, positive quarter for us. So I think we’ll take all those things in consideration. But I think the way the capital structure, the way we have laddered it over the last several years really de-risks us from that standpoint, just in terms of being sort of methodical regular issuer on a year-to-year basis.
Bryce Rowe: That’s helpful. And then, maybe just one follow-up on the restructuring to the resolutions. Obviously took care of some here in the first quarter, but curious I assume that workout group continues to kind of work hard on the other situations. Can you speak to maybe the pace of those potential resolutions and kind of maybe an update on Miami Beach since it was one of the larger, non-accruals that were added in the fourth quarter? Thanks.
Daniel Pietrzak: Yes, Bryce, happy to. I mean, obviously the team will remain busy there and kind of focused for the resolutions. And I thought the point that Brian made was a very good one. I think we continue to make progress on Miami Beach, probably a little bit more of a complicated situation, complicated sort of industry, probably more to talk about there in the coming quarters. There’s a handful of other names that maybe or either on the non-accrual or the non-income producing list that, we’re kind of watching M&A markets closely. We are probably preparing for or thinking about kind of ’24, early ’25 sort of exits there. And then, maybe just one of the larger names that you have is Global Jet that I think is, roughly 44% of the non-accrual balance.
I think we’ve been very happy and with what management has done of late. I think they’ve done a really nice job. That book is at the overall company level on the asset side is north of $2 billion. I don’t believe there’s one credit issue in that portfolio. They recently accessed the capital markets from a financing perspective. And we would have received roughly 130 odd million dollars of distributions as that business continues to right-size its equity base. So I think the team’s done a really nice job there working with the management team and the other sort of sponsors to push that business forward. But those are probably some highlights for you, Bryce.
Operator: Our next question comes from Casey Alexander with Compass Point Research and Trading. Casey, go ahead with your question.
Casey Alexander: Couple questions, Dan. One, in relation to the new underwriting environment, are we seeing repays with higher yields and the new spread compression? Should we be thinking about a drag on weighted average yields as the year goes along? And that’s just, I think a general question, but I’m curious how you feel about that.
Daniel Pietrzak: Yes. Good morning, Casey. I think it’s rational to think that, right? I mean, I think this is not just an FSK point, but people’s books will get rotated. Those rotations could go into lower yielding assets. But I think that lower yield will be driven obviously by the benchmark, but by the spreads as well. I do think though there’ll be some offset to transaction fees that will sort of benefit kind of earnings and maybe sort of smooth that out a little bit. There’s been an extraordinary light amount of volume for probably the past eight quarters. So I think you can probably go back and look kind of across the industry at that. So I think that’s probably a bit of a balance. And then, I think we come back to what Bryce’s question was, we’re working pretty hard on some of these non-accrual or non-income producing names that rotating that into income producing will be quite beneficial to the bottom line.
And we’re still a little bit, we’re within our target leverage range. We’ve still got a little bit of room there, which will help.
Casey Alexander: Thank you for that. Secondly, on the ABL side, KKR has, I believe set up a real effort to attack ABLs, not just withstanding the BDC. So that’s clearly a focus at KKR. So what percentage of the portfolio would you be willing to take ABLs to in the BDC? And where do origination yields there sit relative to direct origination private credit? And is that also a way to potentially offset some drag on weighted average yields?
Daniel Pietrzak: Yes. No, thanks for that, Casey. We do have a real effort there. We have north of 50 people dedicated to that space. We have north of $50 billion of total AUM in that space. I mean, just the nomenclature point, we call it asset-based finance more focused on portfolios of financial and hard assets. And the market, historically use the ABLs as just receivables only. But it is a broad effort for us. We do, as I mentioned, like the downside protection, but specifically, Casey, to your point, we’re probably seeing deals, anywhere kind of 100 basis points to kind of 400 basis points wide of your regular way direct lending deal. I think we are kind of within the range that we’ve talked about historically for asset-based finance inside of FSK.
