Robert Dodd: Good morning. On credit quality, obviously looks right. I mean pickups going up and always getting paid down, et cetera. Have you seen any initial increased discussion from sponsors? I mean it was five months ago, it looks like there were going to be six cuts and sponsors could afford to sit on their hands, so to speak, and wait maybe interest coverage that’s still above one, but moving might resolve itself, if I put it in one way. But with the possibility of no cuts, but the cuts same one, the high interest costs are live longer in the portfolio. So, has there been any change in what sponsors are doing proactively? I said no one increasing amendment request yet? Are there any preliminary discussions there? Or any color you can give on what the outlook is given, it looks like rates are going to stay extremely high for quite a lot longer at this point?
Greg Hunt: Yes. Yes. Happy to take that. So, there’s a couple of things going on. One, over the kind of, I would say, economic environment over the last few years, the sponsors and the companies are focused on really becoming more efficient so that they could prepare for a longer term hold, if necessary. And then as you alluded to, when there was a view that there were going to be five rate cuts, people got excited about doing M&A. So, with the process of rate cuts going away, I think we can at least kind of fall back from a fundamental performance standpoint that the companies are doing well. And then secondly, if you think about the technicals of the private equity market, you still have a lot of dry powder that needs to be put to work.
You still have a number of sponsors that need to return capital in order to be able to raise their next fund. So, that’s going to drive transactions. And there’s going to be a period of time like any time that there is volatility in rate expectations or market valuations for the bid/ask to come together and so I think that’s happening. And that will take a little bit of time to play out. And then the third thing that we’re seeing is more and more continuation vehicles where sponsors have companies within their funds and they need to hold on to those longer to really realize the multiples that they’re looking for. And then I guess, finally, the last thing I would say is that in terms of discussions with sponsors about other alternatives, there are some early conversations around extensions and re-pricings, where they’re coming back and saying, we thought we were going to monetize this year, but we’re going to look to next year.
They’re not at the point in their fund where they need to do a continuation vehicle or they don’t feel the pressure to return capital. And so there are very constructive discussions around the lending groups extending the maturity and addressing the overall structure. So, I would say those are kind of the four dynamics at play.
Robert Dodd: Really helpful. Thank you. I mean a quick follow-up to that one. Does a continuation vehicle constitute a change in control in the mandatory refinancing, does that mean you finance that? Or is it automatic that you get ported across to the new vehicle with the existing loan
Ted McNulty : Yes. So it is typical that that would be a change of control, but it’s also typical in the direct lending space that you don’t just show up one day at your desk and get a notice that it’s going to happen, right? There’s an ongoing dialogue about what the strategy is, what the financing is going to be. And there’s some visibility around the sponsor will come and say, hey, do you want to support this going forward? And sometimes we say yes, and sometimes we say no, at which point they launch a financing process that aligns with their continuation vehicles.
Robert Dodd: Got it. Thank you. And then one more if I can, if hypothetically, the mergers close sometime in the not-too-distant future, how is the something change in the competitive environment out there, BSL et cetera has that changed your plan about churn sets within those acquired vehicles if they were to close?
Tanner Powell : Thanks, Robert. I think I would say, no. I think that you should rely on us or expect us to always be evaluating risk reward in the context of the market environment, what makes sense? And then furthermore, as faced with — as we think about investing, we’re always cognizant of vintage and wanting to do things with a measured approach. And that would be the same if hypothetically these were to close. And so if we are confronting an environment such as what we do today, we would be evaluating the market in a similar fashion and evaluating risk reward and our intention would has always been do not take outsized exposure to any one particular vintage and would expect to connect ourselves in a similar manner, should the merger be successful.
Robert Dodd: Got it. Thank you.
Operator: Thank you. We show no further questions at this time. I would like to turn the call back to management for closing remarks.
Tanner Powell: Thank you, operator. Thank you, everyone, for listening to today’s call. On behalf of the entire team, we thank you for your time today. Please feel free to reach out to us with any other questions, and have a good day.
Operator: This does conclude today’s call. We thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.
