Joshua Easterly: Great, thank you so much.
Operator: Thank you. And one moment for our next question. And our next question comes from the line of Ken Lee with RBC Capital Markets. Your line is open. Please go ahead.
Kenneth Lee: Hi, good morning, and thanks for taking my question. Just wonder if you could talk a little bit more about the asset-backed lending opportunities that you see over the near-term. And whether you could either be taken more offensive or defensive stance around such opportunities given the macro backdrop? Thanks.
Joshua Easterly: Yes. We like that space a lot, the asset-based lending space. If you look at retail specifically, we thought in COVID, there was going to be a significant opportunity. That opportunity went away very, very quickly. We did a couple of deals in COVID. And then post-COVID, given kind of what happened on the macro level, consumer is very strong. Consumers only could spend money by buying goods versus services or experiences. In the retail space, that segment – that those companies had better earnings and better balance sheets than they ever had that is changing. The consumer is starting to weaken. And the retailers who have goods and services – I mean who have goods and sell goods and have inventory they have less market share of the consumer’s wallet.
And so, we expect that sector to continue weakening, which will provide an opportunity for us to provide capital into that space. And so, we like that. It’s asset management intensive. It’s – which you have to have a core competency in doing it, which we think we do. But we think that opportunities that will grow and we’ll continue to allocate capital to it where we find good risk-adjusted returns.
Kenneth Lee: Got you, very helpful there. And then just one follow-up, if I may within the portfolio, non-accrual rates are still deminimis. I wonder if you could talk a little bit more about what you’re seeing in terms of amendment activity in the, portfolio? Thanks.
Joshua Easterly: Yes, I would say it picked up slightly, but still really, really benign compared to COVID so no really significant material amendments. We are seeing amendments, related to software transition, which we think is most definitely positive from LIBOR. All the new loans or LIBOR our software base, but I would say, from a credit perspective, it’s picked up a little bit, but nothing material to speak off.
Kenneth Lee: Got you, very helpful there, thanks again.
Operator: Thank you. And one moment for our next question. Our next question comes from the line of Erik Zwick with Hovde Group. Your line is open. Please go ahead.
Erik Zwick: Thanks, good morning. Just a question on the pipeline, it sounds like you’ve got pretty good visibility for at least the next six months. Curious if you could provide a little color into the industry mix in the pipeline today? And if it’s fairly consistent with the current portfolio if there’s any, industries or sectors that you are targeting or staying away from today?
Joshua Easterly: Yes look, so I would say it’s consistent with some outliers. Emerson is an industrials business, which is a little bit of an outlier for us. So we like that business a lot. We think Blackstone did a great job in buying that business. I think it’s really, really interesting, which we led. And we think it’s kind of mid-cycle earnings and the capital structure both for this time. Maxo also a public to private, I think private is again, slightly in different businesses – is a satellite business. We like that business model. We like the visibility of revenues. We like to sponsor a lot. And then, we’ll always mix in kind of our small energy stuff. But other than that, we’re mostly focused on business services and software, but we have pretty good visibility in the pipeline in the next six months as you mentioned.
Erik Zwick: Thanks, I appreciate that detail there. And just one more quick one from me – I’m just curious where floors are today for new commitments? Were you able to put those in?
Joshua Easterly: They are most definitely – unfortunately, I don’t think they – we’ve been able to push them up. They’re – most definitely in the 75 basis points to 100 basis points. I think 80 basis points – 75 to 100. I wish we’ve looked up and we will be able to push them up, but the market is not there yet.
Erik Zwick: Thanks for taking my questions today.
Operator: Thank you. And one moment for our next question. And our next question comes from the line of Melissa Wedel with JPMorgan. Your line is open. Please go ahead.
Melissa Wedel: Thanks, good morning, a lot of my questions have been asked already. But I thought it would be interesting to touch on just sort of the activity levels in 4Q. Certainly, we were surprised by net exits during the quarter. So given that you’re expecting a few larger exits already that you had talked about during the third quarter call. I’m curious if there – with some as deal slippage into the first quarter or if that sort of commentary on how you’re seeing the opportunities at right now?
Joshua Easterly: So look, look – I didn’t totally get the question. I think so – put most of our exits in Q4, we knew in Q3, and we tried to help people on our Q3 earnings call, which was front line…
Ian Simmonds: Biohaven.
Joshua Easterly: Biohaven, and I think there was a couple more – but those were the big drivers of the Q4 exit.
Melissa Wedel: Right.
Ian Simmonds: And Melisa – the prepayment fees and amortization of upfront fees.
Melissa Wedel: Yes apologies if – my question wasn’t clear. I guess what was looking to explore a little bit more was the level of capital deployment during the quarter, especially since you knew about some of the larger exits. So the fact that it was a slower fourth quarter for you guys compared to previous years. Is that a function of deal slippage into the first quarter or is that really commentary on the opportunity side?
Joshua Easterly: I got it. It’s actually – when you look at our activity levels in Q4, I would say they were €“ it’s significantly up. The fund so – the commitment we made in Q4 are way over historical levels. They happen to be related to mostly take privates that have time periods on that will close in the first half of – 2023. So – the opportunity that it was as strong as it’s ever been. It just happens to be that they were shaded large-cap take privates, which have low regulatory process for that inventory to be turned into funding so – that commitment to be turned into funding.
Melissa Wedel: Got it, thanks Josh.
