David Golub: Well, supply chain issues have been a big theme, not just today, but really over the course of the last, well, since COVID hit. So, we’ve been working with sponsors and with borrowers on supply chain issues for some time. I’d say, as a generalization they’re better now than they were, not completely resolved, but they’re meaningfully better than they were. I think where you’re headed is, if China continues its zero COVID policy and/or if there are new geopolitical tensions that arise between U.S. and China, could that situation get worse? Could that take on a different flavor? And I think the answer to that is yes. So, I think management teams again, this is new in the last couple of years. I think management teams view China supply chain risk in a different way than it was viewed several years ago.
I think it’s viewed today as something that needs to be managed where contingency plans, you know, need to be in-hand. And I think that trend is likely going to continue.
Jeff Bernstein: That’s great. Thank you very much.
Operator: Your next question will come from the line of Paul Johnson with KBW. Please go ahead.
Paul Johnson: Yes. Hi, good afternoon. Thanks for taking my question and congratulations on a good quarter. I only had one or two questions here, mainly on the software ARR lending component of your portfolio. Just given it’s a larger component of the portfolio. It’s been a relatively successful area of the market for a lot of lenders. I’m just curious how leverage multiples have fared in that market on software loans? I’m just taking in observation from the public equity markets. Obviously, a lot of software companies are down meaningfully this year, again in the public equities mark, of course. And we’ve seen a number of high profile tech companies announcing layoffs, etcetera. I’m just curious how that market has fared? And I’m just trying to see if there’s any, sort of headwind I guess in terms of the companies themselves as for software renewal rates and growth in revenue and that sort of thing?
David Golub: So, great question, and let me try to give a nuanced answer because I think it needs a nuanced answer. So, first off, I think it’s really important in thinking about the kinds of borrowers we have in our recurring revenue loan segment. It’s really important to understand those are not like the consumer driven tech companies in the public markets that have seen the giant declines in valuation. We don’t lend to companies like Facebook and Snap and Netflix that are consumer facing. Our loans are to companies that are mission critical business-to-business software companies. Why is that so important? Well, it’s really important because you don’t have the same volatility around demand. If you are backing a mission critical business-to-business software firm, you’re very likely looking at a company with very high recurring revenues.
You’re also very likely in the case of one of our RRL borrowers, you’re looking at the company with significant revenue growth momentum. They have a value proposition to their potential clients that persuades their potential clients that those potential clients can save a lot of money by implementing a new piece of software. So, the business model is fundamentally much more resilient than many of the companies that have seen valuations fall in the public markets. Now, having said that, the source of funding for these companies is largely venture firms and late stage venture firms, and early stage private equity firms, many of whom have investments that crossover into technology sectors that have not done well. So, we are definitely seeing that there’s a growing demand for the kinds of companies that we’ve historically led to that pricing on new RRL loans is meaningfully higher, meaningfully better than it was, and that it’s harder for these companies to raise incremental revenue at valuations that are upticks from their last round.
