Daniel Pietrzak: Yes, that’s a good question. I do — I think we are quite happy about that 15% number that we talked about on the call. That’s year-on-year EBITDA sort of growth numbers. I think when you think about that from a practical perspective, though, that’s really . So I think we are pretty mindful that, that is a backward-looking number and being risk managers where we’re very focused on the forward. So I think that’s sort of top of mind. If you do get a meaningful recessionary environment, you probably do have some correlation with rates coming back down, right? So I think you could be net-net flat from an interest coverage perspective. That said, I mean, these — all of these numbers that we sort of talk about here are averages, right?
And we don’t run the portfolio based upon average, it’s great data to provide, but we have to be focused on sort of the ones that sort of may or may not be maybe sort of problematic. And you asked about how do we deal with these things. I think we’ve built our team pretty meaningful over the last 5-plus years, specifically as it relates to managing the portfolio sort of post any new deal. We’ve got 22 people who have no arguably new deal responsibility but are entirely focused on monitoring the portfolio dealing with challenged credits. They’re an extremely important part of our investment team, and we’ll deal with the case by case to generate the best outcome possible.
Operator: And our next question coming from the line of Ryan Lynch with KBW.
Ryan Lynch: First question I had is you mentioned a slight uptick in amendment activity, which is not surprising in this environment, likely expected to continue going forward. I would just be curious to hear your thoughts on — and this is going to be difficult, but what is really driving that increase in amendment activity? Would you consider that these businesses not able to adjust to the rapid increase in rising rates and support that higher level of interest burden? Or is it more that there’s something fundamentally weaker in that business. And then I’d also be curious to hear, you mentioned you’re seeing support from the PE sponsor. Does that mean that they’re injecting capital or explain what exactly that you meant by that?
Daniel Pietrzak: Yes. I think we are seeing that slight uptick, but I think you’re right, it’s more normal course of business that I think anything else, I don’t think there’s necessarily anything fundamentally wrong with some of these companies when this an activity does kick in. That said, a lot of times, there very well could be supply chain issue, there could be a sort of inflationary pressure point like wages or, quite frankly, the majority of the deals in here do have covenants and those covenants do step down over time so that you’re forced to the sort of company to sort of delever. So there is some financial performance metric that I think is usually driving that. And a lot of times, there will be some of the more credit metrics.
But on the other side, it could just be the literal regular way kind of step down of the loan. I think in terms of support, we’ve seen — we’ve been happy with that. I mean we’ve focus the business on lending the companies and the upper end of the middle market, we think the value of those — the value proposition of those companies remain strong. I think we’ve built out our origination footprint to have real relationships with these financial sponsors. That doesn’t mean at any sort of period they just going to inject capital in for the sake of it. But I do think there’s a longer-term sort of relationship in mind and then the 1 thing we have seen over not just where we sit today. But over the last sort of several years sort of plus, it is more likely, I think, that a financial sponsor is supporting a more recent new origination is probably in the current fund.
They probably have dry powder available. And I think that’s just much simpler than if it was in a fund that was 7, 8, 9 years old, but it’s usually in the form of equity dollars to the point.
