And usually, the company has been refinanced, it’s probably growing and doing really well. And so just because it’s marked at X today, I would say private equity firm owning it for another year or two, probably is the exit could be little to X, but it’s pretty highly likely to be higher than X. But we ride that curve or ride that train with the private equity firm and exit when they exit.
Bryce Rowe: Got it. Okay. That’s helpful. And then maybe a couple more for me. In terms of the assets that come on your balance sheet from I-45, obviously, have a different profile than what you might like to put in your portfolio today, do you look for an opportunity to exit those to create some liquidity, or will you, in fact, ride those out as well?
Bowen Diehl: Well, I would say, they’re over in I-45, but there’s still assets that generate returns in true pressure force [ph], so that won’t change. Certainly, there are bigger companies, for the most part, syndicated credits for the most part, the one we don’t need the liquidity. But on the other hand, yes, we’ll look for opportunities to exit those names at attractive values. And over time, those names will get refinanced out, of course, as those companies grow and sell. But I hope for that.
Michael Sarner: And the spread to LIBOR on these assets is 6.5%, which is maybe on the slightly lower end of our yield continuum, but it’s certainly on the fairway.
Bryce Rowe: Yes, that’s good. Okay. That’s helpful. And maybe one more for you, Michael. You, kind of, laid out the potential, I guess, regulatory debt-to-equity range with the I-45 assets coming on balance sheet. Can you give us a feel for what the economic leverage range might look at? And I’m thinking about the ability to now draw $45 million more of SBA debentures and how that works in to the equation? Thanks.
Michael Sarner: Yeah. I mean, kind of what I said earlier, and I would say it’s not — I don’t have anything to add to it is that it will probably be in the midpoint 8. We’ll finish up this the $45 million on the SBA probably by the summer. And so I think our economic leverage will be around one times with the regulatory something in the [indiscernible]. It will vacillate. Look, there’s opportunities to raise capital at premium to book today. And, so you’d be at certain points in time, delever a bit when the opportunities are there and then pull back the range at other times.
Robert Dodd: I was just saying just — one of the things you just asked, I mean, we have a lot of liquidity on the balance sheet. So the ability to fund into the SBIC subsidiary and borrow net leverage commitments, that’s not hard to do.
Michael Sarner: So, yeah. One other point I’d probably make just on longer term is like we have an eye to the future. We look at our 2026 [indiscernible] bond to repay then there’s clip maturities. That’s obviously two years away, but we’re starting that planning today. So, the collateral that comes back from I-45 comes on balance sheet, and we’re going to look for opportunities to increase our secured financing. So, you give us that, if and when we want to pay down those bonds, if we don’t like what’s going on in the capital markets in terms of unsecured market, you can always fund it with unsecured facility. The I-45 consolidation gives us additional collateral to work with to really continue to diversify our capital sources.
Robert Dodd: Okay, appreciate you guys taking the time.
Bowen Diehl: Thanks Rob.
Operator: Thank you. Our next question comes from the line of Erik Zwick with Hovde Group. Your line is open.
Erik Zwick: Good morning. I may have missed this in the earlier comments, but just in terms of the winding down of I-45, did you provide a timeframe? Will that be done at the end of this current quarter, or would it take a little bit longer? I may have I’m not sure if I caught that earlier.
Michael Sarner: Our expectation is that it would be done at the end of the quarter. But having said that, with some of these credits, when we do the — we essentially do the allocation and we put in for assignment, some of the agents work faster than others. And so to the extent that we are not able to get every asset assigned, it could live on a very small basis for another quarter, but we are working in earnest at the moment to try to get that all accomplished.
Erik Zwick: That’s helpful. Thanks. And then I just noticed that the PIK income increased to just above about $4 million or so in the quarter, higher run rate than we’ve seen recently, is there something — I wonder if you could just talk about kind of what drove that higher? And if there was anything kind of onetime or should we expect something along that run rate going forward?
Bowen Diehl: Yes. So, I mean it’s a little bit higher this quarter, but just to put it in perspective, I mean, two of the companies in the portfolio optioned up to PIK — they have PIK toggles. We don’t have a lot of PIK toggles in our portfolio, but we’ve got a small handful and so a couple of them PIK. One of them was company affected by the rider strike, that’s obviously behind us. And so the company is obviously turning around, it was actually one for the rider strike. So, it’s a very healthy company. It is PIK toggle. The other one is the company that is very effective in the next few years. And so it’s going to have a big — you should have a very big year this year. So, they picked a quarter. So, if you took those two, those are PIK income aspects.
But if you were to look at what’s the trend? If you were to look at the rest of the PIK income, it’s about 5% of our income. And so the cash portion is 95%. If you look back over the last several quarters, it’s kind of where we’ve been in 95%, 96% cash. And so just to help put that in perspective is kind of how we’re trending.
