So I think part of that is you know, a bit of risk aversion on the side of the banks. But then as we sort of like work our way to the other buckets, we still have ample capacity within our existing secure credit facilities. And then on the CRE CLO market, which is I think very transparent in terms of where cost of funds are, that’s probably the least attractive path right now in terms of public CRE CLO executions. But you know what we have done and what we did execute in Q3 of ’22 was what we would describe as a private CRE CLO, where we basically had a bank provided financing that I would say has CRE CLO like structural enhancements, but technically it’s just in the form of a loan. But again I would say, we €“ you know, I highlighted in our remarks that we’ve been able to find liquidity really in all three of those.
You know the first that I mentioned was, which again is a huge advantage for us, is that we still have reinvestment capacity within two of our three CRE CLOs, and again that €“ and like €“ that’s what allows us to be out there. I would say actively quoting, knowing that on the back end we really have a variety of options in terms of available financing.
Steve Delaney: That’s great color on financing and DA notes. Thank you very much. I appreciate it.
A – Doug Bouquard: Sure, thank you.
Operator: Thank you. We’ll take the next question from the line of Eric Hagen with BTIG. Please go ahead.
Eric Hagen : Hey! Thanks, good morning. I hope you guys are well. A couple of follow-ups on the reserve and just the credit in general. Can you say how much of a general reserve you’re holding against the risk rated four loans that are on the watch list? And I’m hoping that you can give some detail on a few of the larger risk four loans, like a few of the ones that you show on page 15 of the deck. Like how strong is the debt coverage in those assets currently? Like what are the conditions that have driven them to show up on that list? And what are the conditions that can get them to migrate to a five. Yeah, thanks.
Doug Bouquard: Sure, so I’ll be providing some context, generally speaking on four and five rated loans as important, just given where we are in the economic cycle and then I’ll turn it over to Bob to perhaps provide a little bit more context relative to your question. But to speak generally, you know, four risk rated loans typically are assets where we either have some concern over the performance of the collateral or there could be a technical default, but the really overarching principle is that we don’t view there to be a significant risk of principal loss, whereas within the five rated bucket is where we do acknowledge that there is risk of principal loss, and so I think those really are the two kind of guide posts. In terms of trends, I think that it is worth highlighting that within the four rated population, just over the past three months, two of the four rated loans that we had actually paid off, and then a third of the four rated loans went to a five.
So I think that’s like a pretty good proxy for €“ you know fours are not necessarily earmarked as kind of headed towards the five, and recent data suggests that two of our last three four rated loans that were resolved is paid off in-part, and that was one hotel loan and that was one office loan, one of which that’s paid off in Q4 and the other which was just paid off in Q1.
