Christian Oberbeck: And just picking up a little bit on what Mike said about the absence of sort of normalized repayments. I mean in effect, what’s happening is that the percentage of prior investments or seasoned credits in our portfolio is growing. And so these are credits that we know, we have a lot of experience with. And so those are very solid credits that we’re involved with and are producing what we feel is pretty tremendous earnings. Our earnings yield at 17% is very substantial earnings yield across our portfolio. And while we do have some…
Casey Alexander: But which is accompanied with a high level of leverage, Chris, I mean…
Christian Oberbeck: Correct. Correct.
Casey Alexander: I mean — it’s — you’re not in a business that investors are necessarily going to be comfortable with an unlimited amount of leverage. I mean, whether the gross leverage is the same as your regulatory leverage, that number can’t go to a number that makes investors uncomfortable or it will be counterproductive, right, no matter what your earnings are. So…
Christian Oberbeck: We understand that.
Casey Alexander: You have to keep that in mind.
Christian Oberbeck: Yeah. We absolutely do keep it in mind. And I think as you’ve heard us on many of our conference calls in these discussions, gross leverage for one BDC is not the same as gross leverage for another. And our gross leverage, given the term structure of our leverage, the duration of our leverage, the absence of covenants, the absence of amortization rates and things like that, we believe makes our leverage quite manageable in the context of our portfolio.
Casey Alexander: Yeah. Okay. Secondly, for Mike, you said that you’re looking forward to some type of broad restructuring of Pepper Palace. Do you think you guys are going to end up with the keys here? Or are you just going to be a — continue to be in a supportive role? And should we expect where your mark is at to likely turn into some form of equity here?
Michael Grisius: Casey, obviously, it’s a private company, so I can’t get into all the details. But certainly, we are working with the sponsor right now trying to improve performance. Recently brought some additional resources to bear to that end. Is it possible that we could end up with the keys? I mean it’s uncertain because it’s a challenging situation. I’ve certainly been — we’ve been in this business for a long time. There are a lot of lenders who are perhaps overly fearful of taking ownership position when maybe that’s the best thing to do. And so that’s certainly something that we would consider under the right circumstances. For now, we’re working with the sponsor, and we’re working to improve the performance. I think the thing that’s really important to note is that its challenges are unique to it and are not connected to anything that we’re seeing in the broader portfolio.
And that — I’d add additionally that the vast majority of our portfolio is experienced performance that’s up — at or up prior quarters. So we’re feeling very, very good about our portfolio. This is a unique circumstance that we’re working on hard.
Casey Alexander: Yeah. Okay. Thank you for that. And then lastly, are you guys afraid that investors will misunderstand the ATM equity sales, seeing as that where you’re actually executing them is below NAV, you’re adding back the difference. And are these investors ought to want to know whether or not these are being bled out into the market or these are single point institutional trades that are not impacting the day-to-day trading of the stock?
Christian Oberbeck: I think that’s obviously a very astute question and interesting. It’s not precisely something I think we can comment on. I think there will be more evidence of what exactly happened when the 13Fs are filed shortly. But it’s something that we don’t have 100% visibility on and we will be reporting and have been reporting on according to the SEC standards on what’s happened. But we have different periods of time, we have as of quarter-end and what’s happened since and then some of the confidentialities of who’s doing it. So it’s difficult for us to give you a precise read on exactly what happened in terms of the trading volumes. But I mean, I think as you can see, there’s quite a few big blocks. And then some of the volume responses after trades were quite good.
After the main trades were done, I think the stock price rallied pretty well. Perhaps you can tell us why people aren’t valuing our stock at a higher rate than they are right now because you have a better perspective on it. But given all things, improving leverage and 70% earnings yield, dividend yield, portfolio stability and all those type of things, we would think that there would be maybe more interest in the stock than there has been apparently.
Casey Alexander: Well, I’ll reserve my answer to that question for my report. I’m not here to educate the other analysts on the call, but thank you for taking my questions.
Christian Oberbeck: Thanks, Casey.
Operator: Thank you. And our next question coming from the line of Mickey Schleien with Ladenburg Thalmann. Your line is now open.
Mickey Schleien: Yes, good morning, everyone. Mike, I appreciate your comments on Pepper Palace. I just want to understand if the issues that are — that, that portfolio company is confronting in terms of its exposure to the consumer is also being manifested anywhere else in your portfolio with respect to companies that are retail oriented?
Michael Grisius: That’s a good question, Mickey. As I said, the vast majority of our portfolio is performing exceptionally well and is up — is certainly at or up in prior periods. We don’t really have that many companies in our portfolio that are direct to consumers. I’m scratching my head to even think of one. Almost all of our portfolio is B2B generally. So — and to answer your question directly, no, we’re not seeing any evidence of that.
Mickey Schleien: Okay. That’s helpful. How about in the healthcare sector, Mike, are there further issues developing there at all? Or is that — are your investments relatively insulated from the wage inflation and reimbursement risk that we’ve been seeing developing over the last several quarters?
