Arthur Penn: Yeah. So we had — in the quarter ended December we had a company called TBC gets sold and we had some equity in that. This quarter so far year-to-date, we just had an exit company got sold. I can’t tell you the name but obviously it will be public in May when we talk in May. So we’re starting to see starting to see as M&A hopefully gets back going again good news and bad news, we will inevitably get repayments of some of our better deals that’s both — that is good news and bad news at the same time. And then as we’ve said, equity co-investment is typically part of the package in many of these we will get liquid on some equity pieces, nothing that major or material but twos and threes and fives can all add up over time and they’re very helpful.
And as we’ve said our MOICs have been multiple on invested capital been north of two times historically. And both TBC and the one I’m referring to were kind of in the three to four times MOIC zone. So kind of we’ll see. It’s – you can’t count on it but as deal flow grows we hope to see some more equity rotation.
Paul Johnson: Got it. Thanks for that, Art. And last one, I’m just wondering if you guys have any sort of idea within the portfolio? I mean if you’ve seen trends of higher PIK utilization from your sponsors or even if you have any idea if that’s the case if you’re seeing higher PIK utilization what sort of percent of your loans might be on PIK at the moment? I would just assume obviously with base rates where they’re at expected to stay high for – even for – into the rest of the year that could be something we would see. But just curious to get your thoughts on that.
Art Penn: Rick do you want to talk about PIK income?
Rick Allorto: Yes. Paul for the quarter, PIK income was about 3% of total income. So currently it’s at a relatively low percentage.
Art Penn: Outlook – from an outlook standpoint, Paul look as we said if this higher for a longer trend continues inevitably, some companies are going to need some relief. And part of amendment structures could be picked. So 3% feels really good now and we’re very proud of that. But we’ll just see how long is higher for longer trend continues and quite possibly it could go higher than 3%.
Paul Johnson: Thanks. That’s all for me. Appreciate the answer today.
Rick Allorto: Thank you.
Operator: We go next to Brian McKenna with Citizens JMP. Please go ahead.
Brian McKenna: Okay. Great. Most of my questions have been asked but I just had one question for you. So we’ve seen some consolidation in the public BDC universe. And I think really what some of these consolidation announcements are getting at are greater scale and bigger kind of public vehicles. So would you ever look to merge PNNT with PFLT just to kind of create a bigger publicly traded vehicle? And if that’s something you would look at? I mean what would kind of have to take place or aligned for that to take place?
Art Penn: Yes. Thank you. So look we – all things are always on the table. So let me just state that. We’re always looking for ways to enhance shareholder value. Over time PNNT has had a different investment orientation, a little bit lower in the capital stack a little bit higher return. In addition, PNNT as we know has had a chunkier, lumpier performance and NAV. So – and it’s not traded as well quite frankly is PFLT, PFLT has had, what we think is a fairly pristine track record. So it’s something we look at from time to time. We are always looking to say “Hey, does it make sense to have two different strategies.” Does it make sense to have two different strategies? As PNNT hopefully gets less lumpy and hopefully trades better then that discussion might be something kind of more current. But it’s something we look at, something we evaluate and it’s a good question.
Brian McKenna: Helpful. Thank you.
Operator: We go next to Melissa Wedel with JPMorgan. Please go ahead.
Melissa Wedel: Good afternoon. Thanks for taking my questions. Mine have also been mostly asked already, but I thought I’d touch on portfolio leverage. Certainly, with a really productive December quarter in terms of originations, it seems like portfolio leverage has risen above where you identified your target as being. Is this — are you comfortable at current levels? Or would you consider sort of rotating out of the government securities and take a large down a bit towards your target?
Art Penn: Yeah. So, there’s a couple of different things in your question. First, the JV, kind of the way the JV works is we usually season assets at the BDC level at PNNT. And then after the season, they may move on to the JV. So December 31, was a moment in time. It was a moment in time. So our goal is really to kind of get down to kind of our core target, which is around the zone of 1.25 times. So 1.4 times, we’re a little higher than that. So we’re going to look to get back down to our target as assets move from the BDC level to the JV over time. Rick, do you want to cover the treasuries, the government securities and what we do and how we do it, so just to clarify?
Rick Allorto: Sure. So at quarter end, we are executing and putting on balance sheet some US treasuries, just from a perspective of kind of balance sheet optimization in terms of kind of how we think about utilizing kind of that 30% bad asset bucket.
