Tom Ellman: So you really got to think about that in two different ways. So for the existing fleet, the interest rate environment actually has very little impact. That’s sort of a car type by car type, what’s the supply-demand dynamic. And that’s really what drives the rate environment in any — on any of those existing cars. On a new investment where you have the ability to decide to invest or not to invest, obviously, higher interest rates makes your threshold a little bit higher for total investment and a little bit more challenging to invest in that kind of environment unless you can get the lease rate. It’s important to note though that, that overall dynamic is helpful because if it makes that new car more expensive, it makes the alternative of renewing an existing car more attractive and that’s really the primary benefit that you get.
Justin Bergner: Thanks. That’s very helpful. Appreciate you taking my questions.
Bob Lyons: Thank you.
Operator: Your next question comes from the line of Brendan McCarthy from Sidoti. Your line is open.
Brendan McCarthy: Yes, good morning, and thank you for taking my questions. I just have a quick question on the balance sheet. It looks like recourse leverage had a very small increase to 3.2 from 3.1 where it’s been in the past handful of quarters. I think I recall the company’s aim is to stay under the investment-grade cap of like 3.5. But are you comfortable with that metric approaching 3.5? Or how can we think about the debt level?
Tom Ellman: Yes. So certainly, we’re very comfortable with where it is. One of our key criteria always is ensuring consistent access to attractively priced capital. So we’re in constant communication with the rating agencies about where they’re comfortable on their various metrics. And it’s very clear that they’re comfortable below that 3.5 to 1 level and certainly could be comfortable with something even higher for the right situation and the right environment.
Brendan McCarthy: Got it. Thank you. That’s helpful. And then one last one for me. I think we’ve talked about this metric before in the past, but I’m wondering if you can shed light on to the percent of the percentage of the lease portfolio that has been repriced at higher rates since you’ve been able to meaningfully increase lease rates since roughly early 2022.
Tom Ellman: Yes. So it’s very difficult to precisely predict — or not for predict, but precisely indicate how much of the fleet has repriced into a more attractive environment. We’ve mentioned for a while now that sequential lease rates were up quarter-over-quarter. We’re going on like three years of that situation occurring, but that was from a pretty low base. And if you look at when lease rates started to get up over that long-term average, it was somewhere in the 2022 time frame. So looking at it from that perspective, you might say about a third of the fleet is repriced in an attractive environment. But if you wanted to go back to when the lease rates increased, you’d have a higher percentage and if you wanted to say when did we start feeling good about extending lease term, we might have a slightly lower percentage. So it’s hard to really give you an absolute number there.
Bob Lyons: Yes. And I would just add too..
Brendan McCarthy: Got it.
Bob Lyons: I would just add too, in terms of the runway we have for positive differential, we have a lot of runway and being able to lock cars in for five-year to six-year terms at these rates at positive differentials, we are embedding a lot of high-quality cash flow into the portfolio.
Brendan McCarthy: Great. That’s very helpful. Thanks, everybody.
Bob Lyons: Thank you.
Operator: Your next question comes from the line of Bascome Majors from Susquehanna. Your line is open.
