Dan Pietrzak: Yes. I mean, it’s a very fair question. I don’t think so. But I don’t think so for a couple of reasons. I think there’s a bit of a floor level to where this market sort of might vary well get to. Now part of that is driven by a bunch of the pools of capital that sort of invest here might be sort of levered pools but I think you’re always going to have a certain amount of a gap between the private debt market and the syndicated market. I think — I think we’ve talked about this on some prior calls. I think if you looked at deals that were done, the beginning of kind of ’22, the market spread was probably 5.75 [ph] kind of on average. I think that would have gapped out in the beginning part of this year to probably 6.75 [ph] on average.
And that’s a pretty big move considering the benchmark also jumped almost 450-plus basis points and that’s something just comparing that basis point number versus the floor that was in kind of the deals. So now I think you’re back down to you’re looking at deals today that are probably kind of 6 to 6.25 [ph]. But I think that’s — I think those are going to be range bound generally in there. And I think it will be somewhat subject to deal volumes, the desire for people sort of to deploy capital and that there’s been maybe excess capital raise that’s looking to get deployed quickly.
Operator: Our next question comes from Bryce Rowe with B. Riley.
Bryce Rowe: I wanted to start with some questions on just the nonaccrual bucket and some of the specific nonaccruals. I think last quarter, you talked about winter and NBG going through a restructuring or bankruptcy process. Can you provide us an update on those as you look at the kind list, not much change in either 1 of those from a fair value and cost perspective, at least within that nonaccrual category.
Dan Pietrzak: Yes, happy to, Bryce and Brian might want to add to these as well. But I think on the winter side, we announced on the last call, this kind of agreement reached as it relates to a restructuring those processes take time. I think we do expect that to get done, hopefully, at some point in Q4, sort of early sort of Q1. But that’s progressing along I think as we would expect and I think we’ve been happy with what we’ve seen in terms of stable performance at the company level. I think the NBG process is pretty much complete. But anything you want to add, Brian?
Brian Gerson: Yes. On NBG, we restructured that business around their lighting fixtures business. which has historically been a relatively strong performer within their portfolio. That’s really the basis of our investment going forward — working closely with the management team on optimizing results, working through costs, working through sales, all those sorts of things. So that’s sort of gone through the restructuring. Now we’re on the other side and now it’s going to come down to execution.
Bryce Rowe: Okay. Okay. That’s helpful. And then maybe 1 more on the nonaccruals. I mean Global Jet dominates the nonaccrual list. I think it’s 60% plus of the nonaccruals fair value marked at a relatively high 75% to 80%. I mean, Dan, what would it take to get that account back to accrual status. Any kind of update you can provide there?
Dan Pietrzak: Yes, I think you’re spot on, on your numbers. I mean it is 40% of the cost number and I think it’s 65% of the fair market value. We’ve talked about the name a couple of different points on the calls. I think the management team inside the company has done a very nice job. I think the underlying asset class, private jets has had a fair amount of tailwinds, no pun intended on the other side of COVID. And remember, there — it’s a leasing business mainly but a lending business as well. Their obligors are both high net worth but also some of the larger kind of corporates in the world. So the performance has been, I think, quite strong. We’ve actually taken a fair amount of cash dividends out of the company and that’s been a return of capital over the last handful of quarters.
I think that’s probably more likely the path forward for ’24. But I don’t think the book has a delinquency in it right now. So I think the question — or the — maybe the harder thing for that business has just been who their competition has been and what the available ROE has been. But again, I think they’ve done a really good job to get to where they are today.
Steven Lilly: Yes. And I’d just add, I think specifically, their ROE has improved significantly. Several years ago in sort of low single digits now it’s in the high single digits. Still is likely to be a little bit better but it’s certainly come a long way and we’re pleased to see the performance of the book.
Operator: Our next question comes from Erik Zwick with the Hovde Group.
Erik Zwick: First question for me. Just curious about your thoughts on the outlook for the weighted average yield for the portfolio going forward, just given your comments about some spread compression for new originations and I guess, interest rates stay kind of in this general range here is — have we kind of seen are we near the peak for this cycle? Or is there opportunity to realize a little bit more as some older vintages with lower yields and lower spreads kind of roll out and you replace them with new and just curious on any thoughts there.
Dan Pietrzak: Yes. I’m not sure, Eric. Your instinct is entirely wrong in terms of probably being kind of near a peak. I think kind of quarter-on-quarter, there’s probably a little bit of we’ll call it further upside, if you just like a kind of spot SOFR at June 30 spot SOFR at kind of 9/30 and some of these loans have kind of reset periods that might be sort of 90 days. So it takes a little while for it to go through the system. I think on the other side of that, maybe to the positive, you I think once we do start to see repayment, some of that could be on the lower-yielding stuff that was sort of maybe put on lower yielding sort of inside the confines of the book or maybe it gets refinanced for some of the companies that are highly performing.
But then, I do think we’re in this environment of rates higher for longer. I think that’s got a great tailwind for income for FSK which we’re sort of quite happy about but I’m not expecting we’ll call it, meaningful upticks from here as it relates to kind of short-term result for rates.
Erik Zwick: That’s helpful. And then 1 last 1 for me and I may have missed it in the prepared remarks. Can you update us on your current spillover position?
