Craig Knutson: So here’s the thing, and Gudmundur mentioned this, right? Over the last 2 years, you’ve seen LTVs either go lower or certainly not go higher, and you’ve seen FICO scores overall on that portfolio increase. So I think the quality aspect of that sort of speaks to itself. And in terms of rate, people forget because before Wall Street discovered the business purpose loan or specifically fix-and-flip loans back in 2019 or so. This business has been around for decades, Stephen, and it was always a hard money business. And so for most of the operators that operate in this space, the profitability of the — of the typical fix-and-flip type project has never really been much of a function of interest rate, right? It’s really knowing what work — buying the property right, knowing what work to do, not doing too much work, pricing it appropriately.
And it hasn’t — it’s never really been about rate. So yes, there are obviously, there are some deals where you have to be more competitive on rates, but it’s not the same sensitivity that you would expect.
Gudmundur Kristjansson: The other thing I would just add also, as you said in the opening remarks, the average LTV of the acquisitions were about 65% and the FICO is around 750. And so with just those simple statistics, we’re clearly not pushing the boundaries on LTV or FICO scores. And that’s really the same position we have had for the last year or so.
Stephen Laws: Great. And I want to switch the slide of balance now with the financing of these and the recent securitization. Can you talk about the terms of that? I mean what are the typical asset light versus how long the revolving period is and how many turns might you get in? And how did the most recent deal price compared to your previous deals? And can you remind me if those had a revolving period associated with them as well?
Gudmundur Kristjansson: Right. So on the transitional loans, all the securitization that we have done are revolving. And so on average, the revolving period tends to be about 2 years. And so what that effectively means that for a period of 2 years, you can replace loans to pay off in the transaction and add new loans over the course of those 2 years, that tends to be followed by a 6-month period were things sent to amortize, and then there’s a step-up in the coupon after that, which is incentivizing the borrower to call the transaction. The execution and as I mentioned, we have about $600 million of those securitizations outstanding. The execution usually such that like you’re selling anywhere from 80% to 90% of the bonds that are issued. So the advance rate is about 80% to 90% to UPB depending on what we sell. And the coupon on the A1 that we sold which was 80% of the transaction in this deal was about 8.5%.
Operator: Your next question comes from the line of Eric Hagen from BTIG.
Eric Hagen: So how much of the retained interests from securitization are pledged for repo financing at this point?
Craig Knutson: I’m not sure we have an exact answer, but I would say — as far as I know, we don’t have any of the first loss pieces pledged. We’ve pledged some investment-grade assets but we could pull that together for you and talk to you offline.
Eric Hagen: Okay. Yes, just trying to get a flavor for the structure of the leverage. And kind of to that point, I mean we’ve got the unsecured debt that’s coming to you next June. I want to get a sense for the plan to potentially refinance that what levels you might be looking at how attractive even kind of the current market looks and whether you’d go the convertible route again? Or just kind of how you’re thinking about that piece of your liability structure?
