Kenneth Rogozinski: I think, Stephen, the only thing that I would add there is that from a hedging perspective, as we’ve talked about, our philosophy has really been to hedge our cost of funding where it is floating rate. We really don’t hedge to protect, so to speak, the mark-to-market value of our core fixed income portfolio. I mean, as we think about it, if you look at that first bucket that Jesse talked about in the debt breakdown, the fixed rate debt associated with the fixed rate bonds that are funded by that fixed rate debt. That’s a situation where we really have no hedging done there because we have, for all intents and purposes, a locked in net interest margin on for what is, for all intents and purposes, a held-to-maturity portfolio.
And so to the extent that we were to try to hedge the value of those underlying bonds there, at least from my perspective, to the extent that there was a negative carry associated with that hedging that would eat into our net income and our cash available for distribution. And really, at least as far as I can tell, have no positive impact to our unit holders other than through the calculation of what the book value is on a quarterly basis. So I think that’s historically been the philosophy of the partnership and from a hedging perspective. And that’s not something that I see us changing to worry about managing book value on a quarter-over-quarter basis.
Stephen Laws: Got it. All right. Appreciate the comments this afternoon. Thank you.
Operator: Our next question comes from Chris Muller with JMP Securities. Please state your question.
Christopher Muller: Hi, guys, thanks for taking the questions. So, nice to see the new developer relationship. Just remind me if this is the third or fourth developer you guys are working with? And then on the pipeline for these investments, could we assume that, that pipeline scales up as you add new developer relationships there? And it sounds like that might not lead to more volume given some of the restrictions you guys have in place on capital deployment. But would that allow the JV to be more selective on opportunities that they do choose to pursue?
Jesse Coury: So a couple of things there, Chris. It is four — we have the seven legacy Vantage assets. The two with Freestone, the one senior living deal with ISL in Nevada, and then the new deal in Huntsville that you mentioned. I think as we go forward, those JV equity investments have been very profitable for us and have been great diversifiers of our earning power. So we’re always going to look for what we think are good risk-adjusted opportunities with our current network of JV partners there on that front. As we start to get into a little bit more of a challenging environment in terms of availability of construction financing, cost of construction financing, and looking at what potential exits are, while we do have capacity under our 25% alternative bucket to make more investments in this nonmortgage investment category, I think it’s something that we just need to be mindful of in terms of making those capital allocation decisions and picking the right opportunities for us to both recycle the capital that we’re seeing come back from the exits of the existing portfolio and thinking about the places that we want to deploy new capital into.
Christopher Muller: Got it. That’s helpful. And then I guess turning gears a little bit. Can you talk through some of the differences or opportunities that this new TEBS residual financing has? Or is the benefit just essentially converting to a fixed rate after the pay downs of the other financing? Or are there other differences with residual financing?
Kenneth Rogozinski: Yes, I think there are some pretty significant differences between the new financing that we just closed earlier this month and the previous secured note structure that we had. Jesse mentioned the first big change being the change from floating rate to fixed rate. We’ve seen a significant reduction in our current pay rate, and that rate is now fixed per term. We’ve also extended the term of that financing. That secured note facility originally matured in 2025, and we’ve extended this new facility out to 2034. So a 9-year extension there. The other thing that from my perspective is probably maybe one of the biggest benefits to this is that the form of our previous secured note financing with our lender there was done under our ISDA that was subject to mark-to-market.
And we have eliminated that through this transaction that this was a direct placement of fixed rate tax-exempt bonds to the investor community. And so there is no mark-to-market provisions or collateral call provisions associated with that. So I think when you take all those factors together, from my perspective, it’s a significant improvement over the existing financing that we’ve had in place without the pledging of any additional collateral.
Christopher Muller: Got it. That’s very helpful. Thank you for the color.
Operator: [Operator Instructions] Our next question comes from Ron Lane with Value Forum. Please state your question.
Ron Lane: Hello. It just dawned to me while listening to the conference call. This is my seventh year with ATAX and now GHI. It’s been an interesting journey. Jesse, I need your best educated estimate and then your best educated guesstimate. The estimate would be for 2023, which will be over in, what, about six, seven weeks. Eight weeks were up, seven weeks, I guess. The percentage of your total cash distribution is only that are taxable versus tax free and then more of a guesstimate, although you have a pretty good handle of where you’re heading in terms of where your money is going for 2024. Where it is that percentage-wise then taxable versus tax rate? I won’t hold you responsible to that, by the way, at the end of each year.
