Joshua Easterly: Yes, it’s a good question. I think you’ve asked this question last year to some other question maybe last year. Look, we don’t model activity. We don’t really model activity level we’ve never historically — we’ve updated guidance throughout the year based on activity level, but we never modeled at the beginning of the year. It’s just too hard, based on credit spreads, effectively based on credit spreads or some idiosyncratic things that happen in our portfolio. And if those are known, we will definitely model them. But given that none of those are known and we don’t model directional credit spreads that drive portfolio churn, we’ve just never historically modeled it. And so — and it’s not modeled really this year as well.
I think when you look at activity levels such as OID and prepayment fees, I think the assumption is we use kind of two to three portfolio turnover on an individual basis, which drives some level of those fees. And then tightening market environment, average portfolio life will be much low or activity level will be much higher. And so we just don’t model it. So I don’t think it’s a market view. I think it’s just how we build our models that we grew, that’s the upside in the model because it’s very difficult to model.
Robert Dodd: I appreciate that. I really appreciate that comment. It’s not an earlier market view, which open more .
Joshua Easterly: Just real quick, if you ask me to like give you my best. I would say that that we’re — that there are — the market will be bifurcated, which will be good companies will have access to capital in ’23 and ’24, which will probably drive some activity level. And people will have to deal with the tails. But credit spreads are starting to come in a little bit. You’ve seen it in Q4. I think you’ve seen it year-to-date. And so that is a leading indicator of activity levels, probably — or portfolio turnover increase in our book.
Robert Dodd: Understood. And you don’t have a lot of tails in your portfolio. So fantastic. On the other question, after the repayment of the unsecured in January, you’re at about 40% unsecured of your capital stack, which is acceptable like towards the lower end of what you’ve historically run. And it’s towards the lower end of what the rating agencies want, et cetera. It’s not going to go down again until November 2024, right? But — what’s your feel on where you’d really like that to be understand that right now it’s a pretty expensive environment for unsecured, but are you comfortable at $40?
Joshua Easterly: Well, I think we are. I think we built our balance sheet, we built our — it’s a function of how much revolver capacity one has. And we have a ton of revolver capacity and liquidity. And so we’ve paid for that. And it’s hurting our economics. It’ hurting our economics in the sense that we pay commitment fees on that on the unused portion, we paid upfront fees on that. And so, it’s hurting our economics. And we like paying for the insurance to allow us to ride out moments for the unsecured market is not as attractive. Although spreads have started coming in significantly in the last two to three months. And so we’ll be opportunistic. We’re most definitely at the low end. If portfolio grows, it will creep a little bit lower because our mix will be — the marginal portfolio growth will be funded on the revolver on the secured side.
So I want to say it will be flat from here on out because that assumes no portfolio growth. The portfolio growth on a marginal basis would be funded with the revolver. But we most definitely will be back in that market. We like that market. I think we’re one of two people in space who have at least a BBB flat rating. I think it’s us in areas. And so we were one of the two higher rated people in the space. And so we like that market. We have access to that market, and we’ll most definitely be opportunistic. But we paid for an insurance and since we pay for it, we’re going to use it, and we priced that into our economics for our shareholders. So I hope that answers your question, Ian, I don’t know if you have anything to add?
