We have line of sight on a couple that we’ve spoken about in the past. And then I guess the other part is cost of capital or cost of debt. And as I mentioned, our term debt right now for the next two and three plus years is pretty locked in at attractive pricing. So when we think about cost of debt on the existing balance sheet, we’re in a good place there. And the other variable, I guess I would say, is on the operating expense side. So we’ve had some volatility from excise tax in 2023, given the over earning of the dividend we’ve had a couple of quarters where we had some legal fees from some workouts. So it’s those type of things that we think about when we look at covering the NII threshold that we’ve been at, so and of course, the likelihood of incentive fees in coming back.
So we reported no incentive fee this quarter. It looks like, based on where we are from, a NAV decline over 2023, that it looks like it’ll take at least a few quarters to have that come back. So all that said, it creates a view of a pretty stable NII and dividend.
Crispin Love: Okay, great, Chris, thank you. And then can you just give an update on where leverage is today? Is it safe to assume it’s pretty close to where it was at the end of the quarter? And are you able to utilize the credit facility today to fund investments? I’m not sure if I missed that.
Christopher Mathieu: Yes. So we are at the same level of leverage now, maybe slightly less today. And then as far as use of the facility, we have full use of it. We can advance and borrow in the ordinary course. It’s fully compliant and in full use, and the revolving period is in good order, so there’s no restrictions or limitations on that use.
Crispin Love: Okay, great. Thanks. I appreciate you taking all my questions.
Operator: Thank you. And our next question comes from Vilas Abraham with UBS. Please go ahead.
Vilas Abraham: Hi, everybody. Thanks for taking the question. You touched on this a little bit with your previous answers, but just on new money yields versus existing portfolio yields. Can you just talk about that? It sounds like you think it’s going to be stable. I thought I saw there might be some compression in the levels there. Just talk about the spreads, any dynamics there that we should be thinking about moving forward?
Sajal Srivastava: Hi, Vilas. This is Sajal. Yes, I would say so. Our new asset yield has been pretty consistent, 14.3%. So generally stable. And we continue to expect that to be stable for a couple of reasons. One is obviously we set the prime rate to the current prime rate on our transactions. For those floating rate transactions, we have about 40% of our book is fixed rate investments. And so, and then as we look to the targeted rates for what our team originates at, so I’d say we expect to continue to maintain our portfolio yield for new assets, regardless of rate environment.
Vilas Abraham: Okay. And yes, you mentioned fixed rate investments. What’s your ability now to make those kinds of investments? Just given that kind of general expectation is that rates are going to be lower at some point in the next one to two years?
Sajal Srivastava: Yes, I’d say we’re opportunistic when it comes. It’s a function of, as we look to overall structure and credit and risk of a transaction. So it’s absolutely something our deal teams are considering and our credit teams are evaluating. And so I would say there’s no — it’s not 100%, but it’s very much opportunistic and depending on the company and the structure and the opportunity.
Vilas Abraham: Okay. Got it. And just a general message on NAV, I guess, is it fair to listen to your comments and kind of interpret that you feel like we’re at a trough here? And just given some of the dynamics you’re seeing in the portfolio around some of the upgrades you’re expecting. And I think you mentioned credit stabilization throughout the year, that we’re kind of flat to up here as we go through the year.
Sajal Srivastava: Yes, listen, teams are hard at work managing the priorities. Portfolio is a high priority. I think we feel good about the equity fundraising activity. Listen, I think credit is stabilizing, but it’s still a very, challenging venture overall venture capital market and so we want to be mindful and practical and reasonable, better expectations. But again, I think we’re seeing some positive indicators. We’re also feeling good about the public equity markets and at least where those multiples are as we look to our public, sorry, our private warrant and equity portfolio. We obviously saw some value accretion here this quarter. And we expect if markets continue to stabilize and improve, we would see some more fair value coming there. So I’d say it’s a balance, but we don’t want to be too optimistic. We want to be real. And this still continues to be a challenging environment, but we’re doing a good job managing through it.
Vilas Abraham: Okay, if I could just squeeze one more in here. You talked a little bit about shift in terms of sector and geography, in terms of strategy. Have you considered at all a shift in the stage of venture backed companies you invest in, namely trying to go maybe a little bit later stage? And is that even possible given triple points set up? Just curious around your thoughts there.
Sajal Srivastava: Yes, listen, I think as a credit manager, our job is to evaluate all of our performance and investment strategies. So we’re obviously always looking at our performance. I would say you bring up an interesting point. I think in the bigger picture, given the economic environment and the capital markets environment, we are absolutely seeing companies stay private longer. And as a result, we’re seeing demand from companies later in the stages. We call it lower venture, middle market. These are EBITDA, positive venture capital-backed companies that are coming back to us for follow on financing or that were companies that were over funded with equity during their venture stages or early growth stages, but now recognize that they’re going to be private for longer.
And so we’re absolutely looking at those opportunities. We’re excited about those opportunities, assuming the yield profile fits. But yes, we are absolutely seeing from opportunities from later than what we call venture growth, EBITDA positive or lower venture middle market companies. And they absolutely fit into the investment strategy of TPVG and, are actively deploying capital and looking at opportunities there.
Vilas Abraham: All right, I appreciate all the color. Thank you.
Operator: Thank you. And our next question comes from Paul Johnson with KBW. Please go ahead.
Paul Johnson: Yes, thanks for taking my questions. Most of mine have been asked, but I wanted to ask just about the 584 raised or so during the quarter for your portfolio companies. I think you said it, but I might have missed the company name, but I was wondering if that was skewed by any, just one particular company or deal that was in that number.
