Andrew Milgram

But my first boss on Wall Street used to say, nothing so focuses the mind like a coupon payment.

Right.

And that is very true.

When you have to make that contractual payment that is, let's say, generally speaking, non-negotiable, you get to a point where you have to make a hard decision about, do I need to restructure or can I persist?

When we looked at the data set over time, we've seen a few important characteristics.

The middle market, EBITDA, essentially deteriorates every year.

It just gets worse and worse and worse.

Now, we compare that data versus public filers, and we look at the Russell 3000.

So in that same period, those companies have public market access, so they tend to be better capitalized.

They have, let's say, broader management teams.

They have more access to resources.

Those companies have done persistently and consistently better.

EBITDA is strong and growing.

Margins are steady, generally in the mid-teens.

In the middle market, EBITDA is challenged.

I mean, there's no other way to put it.

I think over the measurement period in the most recent data,

EBITDA has been down 20%, 25% since 2019.

That's really a difficult place to exist.

Margins in the middle market are also much, much, much narrower.