So, the I think that’s one of the reasons we’re seeing more payoffs than a lot of others, but — and I expect that to continue. So, this cash pile could go higher, but there’s nothing in the system right now that would indicate that we have too much cash or we need to suddenly get rid of it. We’re easily covering our dividend. We expect that to continue. We’d love to get to a point where I think the credit cycle is over and then we can start looking at that dividend, proactively and sharing profits. There’s other ways we can get money to shareholders through stock as well as bond buybacks. So, we like where we are. Played for higher rates, thought they were coming, and they’re here. So, — but — and probably the lesson learned is because rates were low for so long, a lot of property owners really should have taken some steps to protect themselves against higher rates because the insurance cost of that was quite low just 24 months ago.
And I’m sure if we get an in another cycle in our lifetimes where this happens, that that will be a lesson that comes back onto the blackboard for people.
Steve DeLaney: Thanks Brian. I appreciate all that color.
Brian Harris: Sure.
Operator: Thank you. Our next question is from Matthew Howlett with B. Riley Securities. Please proceed with your question.
Matthew Howlett : Hey, thanks. Good morning. Thanks for taking my question. Hey, Brian, I mean, like you pointed out, you got plenty of excess capital to balance sheets in terrific shape. You have a high class problem where you’re getting more repayments. What in your, I think you’re below one, one out net of cash XC securities. What’s the argument against really getting more aggressive on a share buyback, open market purchases, Dutch tenders, Is it the opportunity cost? You want to wait for what could be opportunities in real estate? You’re probably getting a high 20% leverage returns on securities. You’re obviously buying back some of your corporate debt. What would be it just seems that the IR analysis is 20 plus percent on buying back stock at these levels?
Brian Harris : I don’t have a cogent argument against buying stock back at these levels. So there’s no resistance to it. And I want to stress this, that there’s a lot of opportunities right now, despite the fact that we seem to be husbanding cash around. We’re not. We’re just not seeing enough opportunities, at least on the non-QSIP side of things. Yeah, you can buy treasury bonds and that’s a fine place to park for a little while if you want to make five and a 0.5% and hold on to cash but securities that the a classes are in the CLOs are still the best game in town. We could move over to conduit, but those have duration and hedging right now is very expensive So I don’t see that happening. We are starting to look at real estate cap rates have backed up and we might see skip a little bit of the normal lending portion of the movie and just move right to the equity side of things, depending on how cap rates move.
And the triple net lease stuff is getting pretty cheap also right now. So there’s no way. And I just want to stress that when you’re in a restaurant and they tell you, here’s our specials today, and they all sound good, you can’t get one-third of each of them, right? But you can do one-third of each of these. And so while I don’t have any objection to get buying stock back we do it during open window period and unfortunately a lot of open window periods are not available when the end of quarter is come and things get particularly interesting on the volatility side. But again, patience, nothing wrong with it. We can buy our bonds back and generate big returns very quickly there, but de-lever the company, but get rid of unsecured debt. We’ve always suffered from being too small though.
And so I think that, In order for us to acquire the stock through a repurchase program, yes, it’s cheap, but it has to get really cheap and then we act. And I think Paul read the levels that we’ve been buying our stock back then right here. So if all things, we’re not going to communicate all of those policies in an earnings call, but if we were to get off the phone now and the window was open, yes, we’d probably start acquiring some stock here and certainly we’d be looking at some of those bonds, not all of them, but certainly lots of them. And so it’s a pretty attractive investment landscape, and we don’t necessarily need to buy things that other people are working on. We can do things internally here ourselves. But we kind of balance all of those at one time around, do we want to become an IG company?
Do we want to maintain liquidity? Are we at all concerned if anything should get much worse? And no one ever talks about that. Could things get much worse? And there’s a couple of headlines going on right now in outside of Russia and in the Middle East that could make you think this could get worse. So we’re a little cautious there too. So I would say when we acquire our own instruments, it’s really because they’ve just gotten silly. But we like having them out there and we’re happy to support them. We like our investors in those spaces. And you’ll rarely see us just buy stock without bonds and you’ll rarely see us just buy bonds without stock because we’re rather respectful of both sides of that investor line.
Matthew Howlett: Makes total sense. I know you’ve been buying back stock. I figured I’d ask the question because you guys are in a unique position to be able to do it aggressively. And look, the buying back the debt here at $0.80 is terrific. It looks like you’re buying with the $0.29 and the $0.27. Am I seeing that as you’re primarily buying back?
Brian Harris: That’s what we were looking at. I mean, there weren’t many repurchases last quarter, but yeah, that’s where we were. I think that’s where we were. We have a number for each of those three bonds every morning and we pass that over to the traders and if they come up at those prices, we buy them. So we do have a price for the 25 also, but given that it matures in two years, you can imagine it’s a higher price. So there’s no, they’re all investments that we’re interested in and the oddly, the reason the short bond is the higher price isn’t just because it’s short, it’s also the highest rate. So when the 2025s pay off, we’re actually going to the average rate of our corporates is going to fall to 4.5%. So, it’s extraordinarily cheap capital.
The entire complex is below the treasury curve at this point. So again, don’t look to take them off the market because, but the pace of investment has not been what we would have anticipated. And I think that goes back to what Steve said earlier, that it’s not just rates higher. It’s the pace at which they got there. I mean, there are rate shocks reverberating through the system. I think you guys all follow the residential space also. And if you saw the givebacks and book value, it was unbelievable. And so patience, I don’t think the train’s leaving the station here. I don’t think that we are in danger of others doing better than us in the near term because we just have a lot of capital. But on the other hand, when you look out at the company and you say, well, yeah, the market cap of the company is $1.2 billion and they have $850 million in cash with no debt coming due and less than 10 coverage, you just sit there and shake your head and say, how is that?
