Edward Ross : Sure. Great question. I think your initial comment of 0.8x to 1.1x is a good one. It’s — where we have operated really has been 0.8x to 1.1x historically, we are comfortable going over 1.1x as opportunities arise. But there was an opportunity to raise capital here. We saw that Q4 was going to be active. We also believe 2024 will probably show up a little bit more active than 2023. There’s just pent-up demand out there, and there’s a need — more of a need for actually transactions that take place. So we thought being prepared for that made a ton of sense. So I wouldn’t say we’re concerned. We were raising capital to position the business to withstand concerns about the economy. It was more to position the business to handle the opportunities that we think we’re going to see here going forward.
Mickey Schleien : Okay. I understand. My last question is more — a little bit more of a housekeeping question on interest income, which increased 13% quarter-to-quarter, but the debt portfolio at cost actually declined 1% and your average portfolio yields only increased 10 basis points. So the interest income growth seems high unless I’m doing my math incorrectly, was there anything sort of nonrecurring and interest income accrued this quarter that we should be aware of?
Edward Ross : Sure. I’m going to let Shelby take that, I understand your question, but I’ll let her take that.
Shelby Sherard : No, there were no kind of particularly unique items. With debt repayments, we will have acceleration of OID but that’s kind of routine in course with respect to repayments.
Edward Ross : We also had interest income from some of the cash on our balance sheet throughout part of [indiscernible]. And we — average loans outstanding were higher during the quarter than they were at quarter end. Some of the repayments.
Mickey Schleien : Right. Yes. I was going to just say — it sounds like [indiscernible] with the cadence of the investment — investments that you made, right?
Edward Ross : That’s true. Correct.
Operator: Next question will be from Robert Dodd of Raymond James.
Robert Dodd : On the color, I had about — running the ATM because you’re seeing more opportunities, can you tell us about the — I mean you mentioned here that the quality of deals available, they were very high quality. If I look back last quarter, obviously, it varies about whether you’re pursuing them or not. But last quarter, some of the available deals in the market you described as hit on this. So have you seen a change in kind of the mix of deals that are coming to market that are higher quality, which then justifies the — running the ATM because if you can obviously win those deals, it’s great for portfolio quality overall. I mean, is there any mix going on at the moment, mix-shift?
Edward Ross : No. Not really. What I would say is, look, deal flow — actually, deal-flow wasn’t bad by any stretch of imagination in Q3, quality has been hit or miss all year, though, is what I would say. So that’s a big piece of the puzzle. And then in terms of our investment activity and in Q3, we had a couple of deals spill over into Q4. And again, we think Q4 will be a stronger investment period than Q3, partly because of that and also just the pickup in activity. From a type of business or mix that we’re seeing, it’s really largely across the board, where we’re spending time on those companies that have recurring or reoccurring revenues. So pretty strong stability backgrounds, if you will. And so — and high free cash flows.
So those are the types of businesses that we are focused on, and we are seeing a little bit of an uptick. But some of that’s just Q4 versus Q3 where the summer slows things down a little bit. But we are hopeful that next year we’ll be and kind of anticipate a little bit of a pickup in M&A activity in 2024.
