Traci Alloway

I'm not going to give them six and a half times leverage to do something.

It just doesn't make sense.

And if you go back to the point you made to begin the podcast, how private credit and the proliferation of the loan market has impacted the high-yield investment-grade market.

What was once a two-tiered market of investment-grade, non-investment-grade, has really become a four-tier market, investment-grade, high-yield,

leveraged loans, private credit, in that order of credit quality, most of the credits that do not meet our underwriting standards have fallen into leveraged loan and private credit.

So the high yield market is substantially higher quality now than it was before.

The double B portion of the market is

approaching 60%.

That used to be about 35%.

And the riskiest segment, the triple C's, is now about 9%.

That used to be over 20%.

So just by our underwriting process, we kick out a lot of the highly levered companies, kick out a lot of the companies that do not have the interest coverage that we're looking for.

And so it's a function of our underwriting process, but also where the more risky companies are financing themselves these days.

All right.

Well, I think we could talk about this even more.

We're going to have to leave it there.

John and Craig, thank you so much for coming on All Blots.

Really appreciate it.

So, Joe, I found that conversation super helpful just to sort of, again, contextualize private credit in the history of the bond market.

I do think setting aside whether or not this is like a systemic issue.