Mickey Schleien: Well, just in the auto sector, were any of those credits materially impacted by the strikes?
Art Penn: Jeff, names specifically on which names specifically, sometimes these…
Mickey Schleien: No, I just look at the breakdown of the industries in the last Q settlement.
Art Penn: Yes. I mean if it is — yeah, as far as Auto, it would be something typically tied to auto aftermarket which is kind of a hopefully a steady state. But we don’t have any kind of exposure to OEM or exposure to stuff that was related to strike. It will be products that are sold in the aftermarket. We have car wash companies. I don’t know whether that’s — I forget whether that’s a car — auto or whether that’s consumer or something else, but things like that.
Mickey Schleien: Okay. Just following up on Ryan’s question about terms. In the upper middle market, as we started to see some spread compression, particularly for higher-quality borrowers. Have you seen that starting to trickle down into the middle market at all yet?
Art Penn: Yes. I’d say, kind of in our core market of $10 million to $50 million of EBITDA in the upper end of that if a credit is perceived as really an excellent credit and a space that people love, it may get a little competitive and spreads may tighten a little bit, again if it’s an excellent credit, we’re happy to be competitive. And then there’s a piece of the world of as you get to the middle of the $10 million to $50 million or certainly lower end where there’s a lot less competition and we haven’t really seen much spread tightening there.
Mickey Schleien: Okay. My last question, I appreciate the recent developments language in the press release. Can you tell us anything about repayments for this quarter apart from things that you might be transferring to the senior loan fund?
Art Penn: Repayments have been light quarter-to-date.
Mickey Schleien: Okay. That’s it for me this morning. Thanks for taking my questions. And have a nice holiday.
Art Penn: You too.
Operator: Thank you. And next we’re going to go to Maxwell Fritscher from Truist Securities. Please go ahead.
Maxwell Fritscher: Hi. Good morning. I’m calling in for Mark Hughes. So of the companies that have had amendments in fiscal ’23, what percent would you judge has received additional capital support from the sponsor?
Art Penn: I’m going to say, certainly the minority. I’m going to guess maybe about a third, most of these are very minor amendments in certain cases the sponsors, we do ask them to put up additional capital. And in all cases so far that additional capital has been forthcoming. And that’s one of the nice things about where we are with the covenants we have, the information rights we have, and the loan to value that we have. For a relatively small check sponsor relative to their initial investment in these companies, a sponsor can solve the problem. So certainly the minority where there’s a cash investment, we haven’t seen any issues with the sponsors coming forward to date.
Maxwell Fritscher: Okay. Thank you. And in regard to the interest coverage, have you seen a meaningful amount of portfolio companies forgo CapEx or hiring in order to keep of favorable ratio?
Art Penn: Great question. We certainly sense that with less cushion in the system, I mean these are very thoughtful companies, anyway the vast majority owned by private equity firms. So they are always looking at the return on capital over the return on equity. So they’re always focused on and I think there is an even higher — higher focus today. But on average today our companies are covered in our interest two times or something. So it’s certainly not the lush times of a year ago when it was kind of 3 times interest coverage, now you’re down to 2 times. So we still think there’s reasonable cushion but there’s certainly a heightened awareness of the interest cost that they have to bear. In some ways that’s good, they’re focused they got a lot of equity beneath us and they want to make sure that their equity is safe.
Maxwell Fritscher: That’s helpful. Thank you very much.
Operator: Thank you. I would now like to turn the conference back over to our speakers for any closing remarks.
Art Penn: Thanks, everybody, for being on the call today. We wish everybody a happy Thanksgiving, a Thanksgiving of gratitude and we look forward to speaking with you in early February at our next earnings release. Thank you very much.
Operator: Thank you. Ladies and gentlemen, that does conclude today’s conference. We appreciate your participation. Have a wonderful day.
