Ryan Lynch: Then the other question comes to, and you talked a little bit about your prepared remarks, but just the net portfolio losses that were recorded in this quarter and really the last couple quarters driving kind of the decline in nav. I know last quarter you talked about, it sounds like a lot of it is marked to market but they’ve certainly been outsized relative to other BDC marks. Now I know you can’t comment on how other BDCs are marking their portfolios, and I also can understand that when I look at non-accrual specifically, they have an increased significantly so that that is one indicator that credit at least from a non-accrual default standpoint hasn’t increased meaningfully, but still the declines in your portfolio, the markdowns have been well outside the normal range for what we’ve seen BDC.
So, it feels like there’s something more going on besides mark to market. Can you talk about that and why those markdowns spend so large and what you are expecting? I mean, if it is just mark to market those will eventually theoretically recover depending on how market conditions play out over time, but it it’s — just they’re really outside relative to the other BDCs.
Ted Goldthorpe : Yeah, I mean it’s obviously something that we — if you think, just take a huge step back, right? If you think about what happened with markets last year and where comparable indices were last year and we’re levered, we’re not really a big, big outlier vis-a-vis the overall markets. We are an outlier vis-a-vis the BDC sector, and I can’t speak to other people’s policies, but 84% — we are not seeing a market increase or decrease in credit quality. And our average, as Patrick mentioned in his remarks. 84% of our debt is first lane debt, and our average debt mark is at 91.6. So, I hear what you’re saying, and by the way, we obviously look in the mirror every single day and by the way, we look at our peers’ earnings as well.
But again, if you look at where our valuations are vis-a-vis market indices, I would say, we feel that like you can shock our portfolio in lots of different ways and you can add a very elevated default rate to this, and there still should be a pretty big upside to our nav. And so, again, I’m not going to comment on broad valuation policies, but I would say our — we believe our NAV declines are largely temporary and mark-to-market nature. I mean, there is, obviously, there’s always credit specific stuff, but our non-accruals today at fair value are zero. So I would say our — I hear what you’re saying actually, and I — it’s something that obviously we talk a lot about internally here. But obviously, we always want to be conservative on valuations and adhere to our valuation policies.
Patrick Schafer: Yes. And Ryan, the two other minor small points I would add is perhaps unlike some other BDCs we do have a little bit of a chunk of a liquid portfolio that has a lot more true kind of mark-to-market as opposed to like third party valuation type of marks. So obviously, the volatility in the syndicated markets and kind of where that market is has had perhaps a slightly disproportionate impact on kind of our fair value relative to perhaps another BDC that really doesn’t have any level two assets. And then the second thing I would say is, again, not to get into general people’s investment or sorry, valuation policies. We do have a decent reliance on the actual liquid benchmarks and the yields of those benchmarks. So that does ultimately, again, perhaps that does lead to a little bit more, more volatility on mark-to-market, perhaps relative to others if they’re not using kind of CS Lever loan indices from a yield perspective.
