So — and we’re getting good documentation. So it’s just across the board. The deals that we’re doing, I think, are really, really attractive for the portfolio. And the funds that we manage that have more capital, we’re doing as much as we can in those funds. So a great environment for direct lending, the trends, public to private is one driver of deal flow. Add-ons for existing portfolio companies is another. So when we see things that we like, we like them a lot. In terms of opportunities from the banking sector, I’m pretty balanced about this. I’ve been asked it a lot. I think that we do upper middle market, private equity-backed deals. That’s generally not where we’re competing with regional banks. We’re generally competing with other direct lenders, and we’re competing with the syndicated markets and the large banks that are arranging but not holding loans.
That’s what we compete with. So when the regional banks are pulling back, that’s not really in our bread and butter. It stands to reason that these regional banks, if they’re pulling back, that there may be companies who are non-sponsored companies that just have a harder time getting financing. And if there’s any of them out there that are listening, you should give us a call and we’d love to talk to you. But I would say I don’t expect a tremendous amount of that because regional banks are generally not doing non-investment-grade loans for the most part, those pockets. And the reason I say I’m balanced about it and cautious about it is because as regional banks pull back, it does impact the economy overall, and it impacts conditions for our portfolio of companies on who their customers are getting financing from regional banks.
So there may be opportunities. I’ve seen others say this could be good for direct lenders. I’m going to take more of a wait-and-see approach on that and just see what is it going to do to the economy, but there may be select opportunities as well. We’ll just have to see how it plays. Overall, I prefer a functioning banking system and a strong economy, and I hope we get to that.
Kevin Fultz: Okay. That’s really great insight. And then just one more. Can you provide an update on portfolio company leverage?
Craig Packer: Portfolio company leverage. So we talked about interest coverage. Our portfolio company leverage is probably in mid-60s-ish.
Kevin Fultz: Okay. So no real change quarter-over-quarter?
Craig Packer: No. EBITDA, as I mentioned, EBITDA has been slightly up. Leverage is up. I mean it’s really the interest, obviously. The interest is — actual interest paid is what has moved, and that’s why the coverage ratios have moved. But the debt to EBITDA is pretty much flat.
Operator: Your next question comes from Kenneth Lee with RBC Capital Markets.
Kenneth Lee: It’s obviously very attractive direct lending markets right now. Wonder if you could share your thoughts on how would you characterize the overall competitive environment, especially if you look back last like half a year, a year or so.
Craig Packer: I think it’s a good competitive environment. It has been for a while, and we — there are — we consider ourselves, and there’s a small handful of lenders in this category, the large platforms that have a lot of capital, resources, relationships, the intellectual capital, the financing to be relevant to do the large upper middle market deals that we like. And there’s just a small handful of us that can do those. And we are finding that we’re seeing all the opportunities that are out there, and we’re having the opportunity to participate in the ones that we like. In any one deal, there’s going to be a little back and forth on terms, but I think the market is really a lender’s market. There’s not enough capital to do the larger deals.
