Steven Martin: Okay. And where are you putting money out currently? Like the most recent deal you did or the most and most — well I guess you only did one new deal in the quarter, but where — the pricing you’re talking about on some of the new deals for the second quarter, what are you looking at?
Ted Goldthorpe: No, real big change. I mean there’s been a big, big, big delta between where large cap sponsor deals are getting done and where our market is. So, like if you look at trends and covenants, if you look at trends and spreads, they’ve really come in pretty dramatically for big LBOs and they haven’t really come in that much for us. There has been some spread compression, but not really that much. Our deployment really is in mostly two areas. It’s really — there are core sponsor finance first-lien type stuff which is still pricing at 12%, 13% yields. And then number two is, we do have a big non-sponsor franchise where we get paid a little bit more and help out the companies. So like Riddell [ph] kind of fits into that bucket because it’s not a traditional deal.
So again, we haven’t really experienced spread compression in our portfolio, and the impact of the opening up of markets and stuff has been much more muted. I mean, you can see there’s been a big trend of BSLs being issued to take out direct loans. But if you look at our fee income, like it’s never been lower. So again, like as these loans approach maturity, fee income should pick up. But we haven’t experienced the broad-based paydowns that you’ve seen the MSL market, do.
Steven Martin: Okay. You actually just answered one of my questions. But assuming interest rates don’t change much for the balance of the year, because, at this point where they’re speculating one rate change and no one’s sure if it’s up or down. What would you expect to have on the unrealized line? Would you expect the portfolio to — would you expect the mark-to-market to increase, decrease, stay sort of where it is?
Ted Goldthorpe: Yeah. So good question, Steve. I’m just trying to think this through. It would depend a little bit more on where deals are getting done, obviously. And so there’s kind of like two or three downstream effects, which is if I would say the bigger driver of whether we have – of how we have movements is probably a little bit more the M&A market. And maybe that is like a derivative of the interest rate environment. But where we are today, there’s not a massive amount of M&A picking up, but obviously off of like a pretty low base. And so there was a lot more activity this quarter, but off of an incredibly low base for, probably the three — the last three quarters of 2023. And so with that as kind of like the backdrop, it’s been somewhat competitive in our market, which has led to, again, BSL prices declining, decreasing, and even private — again, on the higher side, but private markets spreads also compressing, which is kind of like independent a little bit of interest rates.
They’re not directly correlated to interest rates. So it’s a tough answer, but to say if M&A remains sort of somewhat muted this year because of interest rates, I would say on the margin, we would have unrealized gains because that would probably lead to a continued spread compression and therefore pricing increases. But it’s not — at least in our portfolio, it’s not exactly a direct line between interest rates and the hikes and declines and the price of our portfolio.
Steven Martin: All right. Thanks.
Operator: Thank you. We have no further questions. Please continue.
Ted Goldthorpe: We did have a question about our realized losses. Brandon, do you want to take that?
Brandon Satoren: Sure. So the primary driver of the realized losses during the period was one name in particular that was restructured. It was HDC or Hostway. That drove the vast majority of the realized during the period.
Ted Goldthorpe: Yeah. So just really, it’s one restructured security that we still continue to hold. So anyway, thank you all for attending our call. As per always, please reach out with any questions. We’re always happy to discuss with anyone and we look forward to speaking to you again in August for our second quarter conference call. Thank you very much.
Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.
