On-Demand: The Financing Forum

Michael Ganann:Sure. Thanks, Guatham. Michael Ganann, I'm with BMO Harris Bank. I'm managing director that leads the platform for retail finance within our asset based lending group. I've got a 20 year career most of it in ABL, although I spent five years in LA working in Santa Monica at Wells Fargo Foothill financing tech and software companies for private equity firms acquisitions. But I have a background in asset liquidation working for a firm called the Ozer Group which was acquired by Gordon Brothers in the mid 2000s.

And stops at a Bank of America fleet retail finance and Citizens Bank for eight years prior to my moving to BMO. BMO Harris has about three billion in commitments to the retail and grocery and apparel sectors. About half of that we call non-food retail, that's really my area of expertise. And that is part of our $15 billion asset based portfolio in the U.S national business and that also includes a small piece of ABL commitments in Canada.

Guatham Deshpande:Thank you Michael. Charlie.

Charlie Perer:Good morning, everyone. Charlie Perer co-founder and head of originations at SG Credit Partners. Many of you this morning probably know me from our predecessor company Super G where we started eight years ago really providing stretch pieces or over advances behind the ABL community. But I'm really happy this morning to tell everyone a year ago we got bought by two institutional family offices, rebranded to SG Credit and really rethought our platform. To be an institutionally backed situational credit fund with a broader platform national reach and much larger credit appetite where we now go up to 10 million. We're really focused on solving liquidity needs for mostly family owned businesses, some sponsor but really our white space is the non-sponsor business.

And our platform is now structured cashflow, recurring revenue, software companies, and high net worth lending, asset rich cash poor entrepreneurs that really need a bridge loan. And so we've now transitioned to full structured cash flow, very big in software and very big and lending to entrepreneurs that have bridge financing needs. We can now be senior, junior and opportunistic and really our white space is complimenting banks and ABLs where they're always going to be a partner of ours where we never want to compete directly. And so really our goal now that we have institutional money is to build a national platform to really partner with banks and ABLs around the country.

Guatham Deshpande:Thank you Charlie. Randy. I think Randy you're on mute, you'll probably have to unmute yourself. Seems like we're having some technical issues with Randy but while we are waiting for Randy to get back on line, why don't we kick off with the first polling question. Lexi if you want to kick us off with the first polling question for today.

Lexi:Perfect. Polling question one. How's your business doing? A, great and we're finding new opportunities. B, the pits we fell off a cliff. C, up and down but we will make it through. D, I don't fit in my suits anymore. We'll give everyone a few more seconds to respond. And we are now closing the poll and sharing the results.

Guatham Deshpande:So just to summarize the responses we have about 58% participants that say that it's up and down but we'll make it through not surprising at all. And then a good one third that are finding new opportunities. That's probably on the expected lines and there are few like me that don't fit in my suits anymore because I tried wearing on my work pants earlier today and had some trouble getting in. So let's now see if we are able to go back to Randy.

Randy Mitzman:I work at Assembled Brands, I'm in charge of origination and operations. We're a non-bank alternative ABL lender and our specialty is financing emerging consumer brands and e-commerce companies. So we provide inventory lines of credit to companies that sell stuff online. And the last few months have certainly been a wild ride, but I think we're positioned well given that we lend to e-commerce businesses and these types of businesses and this vertical is a crushing right now. So happy to dig in and be a part of this.

Guatham Deshpande:So actually Randy it's perfect timing because we'll start with you. I don't know if you followed the polling question about we asked the question on how's your business doing? And there is a good 60% that said up and down but we'll make it through. And there was another good one third next said great, we are finding new opportunities. So kick us off by telling how is your portfolio doing in the current environment?

Randy Mitzman:Sure. So when the whole pandemic started in mid March we sat down as an executive team and we had a hypothesis that all of our clients were going to max out availability and pull every dime that they could, and we are going to be putting out fires left and right. And there was a little bit of that but ultimately now that the dust has settled and it's been a few months, in the e-commerce space the customer acquisition costs have come way down. And companies have done a really good job of A, getting PPP money from the government and B, looking at their overhead and really cutting where they need to. So we've seen across our portfolio that companies are starting to get profitable, at least in our space.

And so while we thought everyone's going to be maxing out their lines over the last few months, we've actually seen a contraction in our portfolio. Whereas companies are profitable and they've got the excess cash flow so they want to reduce their exposure a little bit which is great from a risk perspective and for the health of our portfolio. Obviously we want to continue to lend money so we can make as much revenue as we can, but we actually feel like we've got a pretty good grasp on our portfolio and then we're just making really smart decisions when it comes to looking at new business. But knock on wood, we're in an okay place today. And I think a lot of that has to do with we don't have a whole lot of retail exposure on the AR side of things and people are stuck at home buying things online from our clients. So we're in a good place.

Guatham Deshpande:Thank you Randy. Charlie I'll ask the same question to you, can you talk a bit about how your portfolio is doing in this environment.

Charlie Perer: Sure. By and large, our portfolio has performed with better than expected partially because of the PPP. But mostly because we started preparing for not necessarily this downturn, but a downturn a year ago when we got bought. Where our owners are credit oriented and they wanted to use us as really a play in advance of the next downturn. So we thankfully worked very hard to get out of our tougher credits the past year and diversified our business into software recurring revenue lending, as well as collateralized bridge loans. These were great counter effect to the risks involved in casual lending, which is still a core part of our business but diversifying heavily out of it we saw something coming.

We've definitely had our fair share of problems, no one is immune to this, but by the time COVID hit cashflow is probably a third of our portfolio, from a year ago it was 70%. I also think it's important to say, I think the next portfolio test is yet to come as many businesses use PPP for payroll rather than paying their vendors. And there's going to be another liquidity hurdle that's going to come when businesses really start to open up again and have to deal with the vendor issues that they haven't really dealt with. So I really think we haven't hit, we're not even starting the next liquidity hurdle for portfolios.

Guatham Deshpande: Sure. Heidi.

Heidi Ames:Similar, our portfolio is holding up well. We have an objective risk rating system and that is the only objective way to assess the risk level. Weighted average risk rating in our portfolio pretty much has remained the same as pre-COVID. We believe that's partially maybe largely attributed to the PPP. We actually have some borrowers that have thrived in this crisis, there are in essential industries to the stay at home environment examples, food, PPE. And then there are companies that have suffered manufacturing, consumer products, retail stores maybe who have not expanded into the internet. But so far I think we've weathered the storm but still the economy's weak, unemployment is high so we are on high alert for deterioration in the business over the next few months.

Guatham Deshpande:Michael, what are you seen with your portfolio?

Michael Ganann:Well, as I mentioned we are a predominantly in retail and apparel and grocery in the world that I service at BMO. So like some of the other panelists have said, there has been a few pockets of very strong performance. We do a lot of lending into the grocery retail and wholesale space for instance and like Randy, we do finance some e-commerce businesses that have done very well. The e-commerce businesses have the omni-channel retailers have all done very well, although they are generally a much smaller percentage of the overall revenue base for these companies. I guess the on our way to new normal reaction for most is that they're doing better than expected.

Most of the retail brick and mortar stores opened earlier than they thought they would, most have done extraordinarily high volumes from the pent up demand of people being on the sidelines for so long. And what that means is that the companies that we finance, all of whom paired back and became a shell of themselves by the furloughed retail employees, they were able to weather the initial problem of not having any top line revenue come in. And now it's a matter of can these companies sustain this demand and momentum? Can they spend money to amp up their stores again? And that's a big unknown along with the fact that there is a potential for a second shutdown and another spike in coronavirus.

And if that were to happen, it would be very detrimental to a lot of the companies that we finance but generally speaking our portfolio is healthy. We do service a lot of large corporate syndicated loans, those have plenty of liquidity and even the smaller guys as I mentioned, they've been able to pair back and survive in the short term and we'll see how it goes over the long run.

Guatham Deshpande:Thank you for that insight Michael. Lexi you want to move on to our second polling question for today?

Lexi:Okay polling question two. What's your opinion of the stimulus measures taken by the U.S government to stem recessionary effects of the coronavirus pandemic? A, support the measures and believe that they will have lasting beneficial effects. B, happy with the measures but worried about the ripple effect within the next few months when the incentives and payments expire. C, concern that the government is printing money and future generations will pay the price i.e short term game but long-term pain. D, all or none of the above. I'll give everyone a few more seconds to respond. And we are now closing the poll and sharing the results.

Guatham Deshpande:I think we have an overwhelming majority that are happy with the measures but what about the ripple effect within the next few months when the incentives and the payments expire. Anyone surprised by that result? Likely not. I think that's a good segue into our next segment, which is relating to the criteria in lending and I'll kickoff with Charlie here. How is your institution responding to loan requests at this time? How are you solving the liquidity issues in the market today Charlie?

Charlie Perer:By not picking up the phone, no. In all serious, we like most are obviously being cautious and everything is very situation dependent given unlike some of the other we have a very broad range of clients. I would think most lenders have a mix of good and bad situations, we're either being asked to fund a growth opportunity or unfortunately defensive advance. The benefit of being a non-bank lender is that we really have no red tape and can price some attractive loan modifications given the credit markets are beyond tight right now.

Our primary concern is always to ensure we're not just taking pure equity risk. Outside of direct sectors like retail, I think the real loan requests have actually yet to come as many borrowing bases are contracting. And now that the country's opening up, I believe we're closer to the start of an epidemic of breakouts, kick outs, potentially worse for a lot of companies. So I actually really think we haven't really hit the start of it yet.

Guatham Deshpande:Michael how has retail upended the coronavirus and other current events? Can you tell us what's happening with retail lending?

Michael Ganann:Well, there's a lot of crossing of fingers and a lot of hope that social distancing is working and that the opening of retail brick and mortar in a lot of geographies is not too soon. Because the big fear as I mentioned earlier is a second spike that requires an additional shutdown. I think that liquidity, like the other panelists will probably talk about is key for our retail clients and most of them are working toward trying to find flexible solutions. BMO as a lender across ABL has tried to be very accommodating to a point with both our retail and non-retail portfolio for that matter. But the real challenge will be does the company have enough cash to survive the next several months? If they don't have enough cash, do they have enough assets to support upsizing their line?

And what we're seeing a lot of in retail is conversions from the more healthy pre-pandemic companies from cashflow into asset-based structured loans. You'll see that a lot of large corporate names that we are part of have done that from Kohl's to Gap to Macy's and everyone in between. The middle market side of what our business and what we do is slower to react to that just because of the higher risk that lenders face in attempting to structure loans and provide additional liquidity to those middle market companies. So it's a little bit of wait and see, a little bit of reliance on our appraisal community which I can talk about a little bit later in terms of their view on value of inventory. And then just being very diligent with our monitoring of the portfolio to ensure that we're not stuck in a position that's too late to do anything about it.

Guatham Deshpande:Right. Thank you. Heidi or Randy do you guys want to add anything to what was said about the liquidity in the markets? That's okay. I think Lexi, we'll move on to our third polling question.

Lexi:Okay polling question number three. How will the coronavirus pandemic affect the office space needs of your organization? A, not at all we are or shortly we'll be back to the same space and configuration. B, we are making adjustments that will require us to increase our space requirements in order to promote physical distancing. C, we will seek to reduce our space requirements and have all or most of our workforce continue working from home. D, none of the above. I don't have a clue. We'll give everyone a few more seconds to respond. And we are now closing the poll and sharing the results.

Guatham Deshpande:Looks like a house that is slightly divided. I think most participants think not at all. We are or shortly we'll be back to the same space configuration. Slightly surprised by that. And then there are about 20% of the participants that think that they will reduce their space requirement. Another 20% that have not made up their mind yet so that's probably in line the thinking. And moving on to current market conditions I'll start with Randy here. Randy what trends, opportunities or challenges are you seeing right now?

Randy Mitzman:So there was a little bit of a six week low period where like Charlie said the phones were ringing and we were trying to decide whether to pick them up or not. Where I think companies were trying to figure out the government CARES Act and everything else but no, I think the dust has settled on all that and companies are starting to figure out how to best capitalize their business going forward. So over the last even just week or two weeks we've gotten a call, a bunch of calls from prospects that we spoke to in Q4 of last year that said, "You guys are too expensive. It's not the best fit for us now."

 And now they're frantically calling us and saying, "Hey, that bank line that I was looking at back in December didn't come to fruition or I violated covenant XYZ. So can we talk? I would love to figure out a flexible financing solution that we talked about a few months ago now." So I think that's just going to compound as the credit markets continue to tighten and banks start squeezing some of their borrowers. So we've done a really good job of being patient because we wanted to make sure that we didn't do any bad deals and so we've really set ourselves up for when the phones start to ring a whole heck of a lot more. And we're starting to see that progression now that we're set up for success.

Guatham Deshpande:Michael I want to move to you. JC Penny, Neiman Marcus, Tuesday Morning, and several others that have filed for bankruptcy, what challenges and opportunities do you see for lenders in the retail sector in the near term given that there is bound to be some restructuring activity?

Michael Ganann:Yeah, those are the most high profile names, there's others out there and there will be more coming down the pike. I think that in our world serving more of the larger corporate names in particular, we've had challenges with respect to the defensive draw environment of retailers at the early part of COVID. And we're not unique as a bank to this, lots of other large money center banks have had asset cap problems, capital allocation concerns when all those monies were drawn defensively. The good news is that a lot of those non-retail industries have paid back those loans, retail is starting to pay back as they open up a little bit.

So that's been a challenge for us to sort of understand that the allocation of capital from a new business perspective in this environment relative to concerns about that defensive drawing and it's led to a lot of anti-cash hoarding provisions in credit agreements and whatnot that we've seen of late. I think that the pricing also is a bit of a challenge in some deals that haven't been able to be touched since COVID started. If you have portfolio accounts in our world that's pricing is pretty thin to begin with, but probably liable 150 type of deals are not good to have on the portfolio today given yield requirements.

But anytime you can touch a transaction or a new business transaction, we're seeing at least 100 basis point premium on the pricing from pre-COVID so that's good. From an opportunity perspective, I mean ABL has always been as many of you know a go to structure from a restructuring standpoint. That's no exception in retail, it's always been a very optimistic way to ensure that our business is both profitable and relevant on good times and bad. So we've been speaking with a lot of the advisory community across the board for various retailers that have been rumored or are in bankruptcy from either a dip or an exit financing perspective.

On the dip side, offensive dips are very hard to come by because most of the existing incumbent bank groups are rolling into the dip and they're better positioned for exit financings. But BMO is open for that business as well and I think that it presents a good opportunity for us to box in the risk in an asset based portfolio, particularly for those retailers that are cashflow deals today about EDL.

Guatham Deshpande:Thank you Michael. Heidi I want to ask question of you turning our portfolio risk. What risks are you seeing with your existing clients and how are you managing portfolio risk at this time?

Heidi Ames:Well, I guess right now the risk we're looking at industries that are affected, those that are not. As I mentioned before due to the PPP money a lot of our borrowers are in the essential industries that have unintentionally thrived during this crisis. The food manufacturing, manufacturing distributors of PPE, computer tech suppliers. There's some other industries that have suffered oil and gas, steel service centers, printing, those are examples of the more troubled industry. But again, those low companies they were largely saved by the PPP which averted the request for over advance. So far it's been okay but I guess it's kind of premature to start the celebration.

Eventually this PPP money is going to dry up the sales volume for these companies, it has to rebound for things to get back to normal and that could be a long haul. I think the fact that the portfolio has stayed relatively healthy is great, but what is more important is to remain disciplined in all of our collateral and financial monitoring and surveillance, because we're just not out of the woods yet. We still need to deal with the possibility of a recession, we still need to deal with the uncertainties of a post-COVID economy. It's still unknown to see how the liquidation values are going to hold up post-COVID so we don't know. So we just have to remain disciplined and cautious.

Guatham Deshpande: Discipline and caution. Randy how are you managing your portfolio risk? Randy you'll have to unmute.

Randy Mitzman:Yeah, sorry. So we're handling it in kind of a similar way. We're monitoring everything a little bit closer, we've got proprietary tech where we're plugged into on a real time metrics on the business. So we see red flags happen in real time so we can be reactionary right away as opposed to waiting for field exams, quarters that doesn't happen after. And then we're just taking a look at AR in general because we're e-commerce focused, we don't have a lot of retail exposure but just taking a look at certain industries within e-commerce that are better than others and deciding on risk from there.

Guatham Deshpande:Okay. I'll switch gears a bit and just to have our panelists use a crystal ball to tell me what do they see down the line. Starting with your Charlie, you've written a lot on this topic about funding new deals in the post-pandemic world. What some of the key things you are forecasting?

Charlie Perer:Well, I couldn't be more excited where my firm went from a few folks in Southern California to raising institutional money and building a national team for this exact moment. I mean, there exists a void especially for non-sponsored businesses who need capital. And our thesis is that banks and ABLs are going to go back to the basics, meaning they're going to be much more conservative where the past years there were way more aggressive given tail end of the cycle. So past few year saw way too much competition, forced all lenders to the edge of the diving board. We've spent the past year maintaining discipline with fresh capital.

And for us, we provide mostly nonconforming cashflow and bridge loan so we could really perfectly compliment really the rest of the traditional finance community. And I should just say is that I really should give credit to all the panelists on there because their respective firms have carved out white space into what has become an incredibly competitive ABL field. In today's landscape you need to have such a clearly defined brand in the market and a proven ability to execute it and people take that for granted and I appreciate this opportunity. And I think a lot of the folks that had the discipline beforehand are going to have the team and the money coming out of it to really have incredible opportunities, because there's going to be a credit reset. There's no doubt about that.

Guatham Deshpande:Heidi, what's your outlook for the future? Once all the PPP liquidity dries up what do you see in July or August?

Heidi Ames:Well, I guess just as Charlie had I think referred is we anticipate the banks getting a bit more cautious so we think the market for us will improve i.e non-ABL and factors. And yes as he said borrowers are going to run out of PPP so that's going to create demand but we still need to be disciplined in our underwriting standards. Both the pandemic and civil unrest has created a vulnerable feeling. So while we can't predict those things that are inevitably going to happen again, it's apparent that we need to be ready for that disruption if it occurs.

And that means resisting that urge to loan up and sticking to our proven underwriting standards, more diligence on our non-AR asset lending. And we are in the lending business and all of our revenues are from lending so we have to go back to doing that. Perhaps we add to our underwriting analysis, some analysis or if a company can survive in an adverse time for how long and how would an exit if we had to. It doesn't mean we won't lend, we just need to know. And then at some point the economy rebounds, industries come out of a slump and there are borrowing needs. There's a lot of liquidity in the market from very good lenders right now.

Guatham Deshpande:Yep. We're seeing some of our clients launch to date their largest funds to benefit from the post-COVID scenario. And so I think we're seeing our clients have a lot of opportunity and that will continue for probably most of the rest of this year. What I want to do right now is open up for questions from the audience. So audience there is a Q&A button or Q&A tab in your window. And if you want to submit any questions you can go into the Q&A chat box and type in your questions and we'll ask those questions of the panelists. I do have some questions that are coming in. The first question it looks like it's for Charlie. Do you find that banks treat family owned borrowers differently from P backed borrowers?

Charlie Perer:Absolutely. I mean, I think there's such always an emphasis in the deal community on private equity and others, but folks forget that of the trillions of dollars lent in this country so much of it it's family businesses. And families are not able to call their LPs when they need capital and so a lot of what we focus on is the void of capital for families. And we think that's going to be a tremendous opportunity where the banks where probably an ABL is taking a much tougher stance on the private equity given they're able to call capital and have way more options to fund.

Guatham Deshpande:Okay. Again just a reminder, there is a Q&A tab at the bottom of your window view and if you can go in there to submit more questions. We have a few more questions that are coming in. Heidi, this one's for you. I don't know if you can take this one, what lessons learned from COVID crisis in terms of managing the portfolio? I think you addressed most of it, I heard conversations about discipline and sticking to your underwriting. Anything else that you want to add Heidi on lessons learned from COVID?

Heidi Ames:I guess we learned that it's not just COVID, but also civil unrest that can be disruptive. We can't regard this as 100 year event. Be prepared to work remotely and be able to perform all the functions while not in the office. Our version of disaster planning was to handle the portfolio through snow storms, hurricanes, short term weather related issues. It's imperative to have that long-term plan to work from outside the office making sure that every team member has access to the needed technology. You need to be in touch with your team as often as possible. It's not too expensive, it's just the cost of doing business. Speaking to everybody as often as possible, step up your mundane monitoring practices, be aware of companies running up their loan to preserve liquidity.

Discourage this. It might not be a direct violation of the loan agreement, but with reasonable discretion you do have some power. Some finance companies are actually considering anti-hoarding provisions and find appraisals maybe that are local to your borrowers who might be willing to drive to the company and look at the equipment and inventory. We're here out on the East Coast and we're still a little bit more on our lockdown, I know our West it's opened up a little bit more. So it's important that you're able to see those assets, that's what you're lending on. And just make sure your audit scope is sufficient and watch the cash, carefully review the cash, follow the cash. I think that's the most important.

Guatham Deshpande:Sure. Thank you Heidi. Michael this one's for you and it relates to something that you spoke about before. How does the prolonged shut down in retail brick and mortar affect the value of inventory collateral? And in turn, how does it affect lenders approach to underwriting a new capital commitment to the sector?

Michael Ganann:It's a long answer to that question, I'll try to keep it brief. The prolonged shut down in retail, the early stages of it I would say there was an initial reaction from the appraisal community in particular to essentially hit pause. And so that really affected and is the reasoning behind not being able to allocate new capital borrowers our industry. You can't get a third party inventory appraisal, I focus on inventory in our world then it'd be very hard to structure an asset based deal and when new money. What I'll say is that the optimism exists especially in the last two weeks, and especially from our community of liquidators that I am in touch with regularly given the volume of business that retailers have experienced.

And if anybody's been at a Pier 1 or a Stage Stores or Tuesday Morning and seen lines around the corner to get into the store six feet deep of course, you understand this. That the pent up demand that has that been suppressed during COVID is very real and Heidi suggested it's not so real yet in the Northeast, we're still shut down for a large part. But in large chunks of the country, these retailers that are in liquidation are seeing enormous multiples. For anyone who knows the ABL structure in a multiple last year's sales volume is pretty key to understanding the value of inventory. And I've heard multiples upwards of four times in some of those retailers I mentioned post-COVID as these stores begin to open.

All of them are at least one time multiples for all the various liquidations that are happening. So all of that presents a pretty big optimism that the appraised values will bounce back so long as we don't have another shutdown as I mentioned several times. And the appraisers on the inventory side are going to be very cognizant of carving out chunks of time from 2020 fiscal year when dealing with future appraised values. Meaning that the capacity issue and the appraisals may not be as big of an issue in a year from now when we're updating all these appraisals for these retailers. I've heard choice phrases from some of my liquidation colleagues in the industry to suggest that retail is "on fire".

I heard revenge buying as another choice phrase where people are just so angry and stuck in their homes are coming out to buy. So whether or not the volume that's happened in the closing going out of business sales or frankly even in the going concern, retailers are seeing high volumes and better than expected comps is it sustainable? Is a whole other question that we no one really has an answer to. The one note I'll leave you on the going concern retailers that's pretty encouraging is that transaction volumes and conversion rates are very high. So you're not seeing big foot traffic in the stores obviously but people are going there for a purpose.

And so if they're going there for purpose, they're spending their dollars at a higher percentage than they ordinarily would just by browsing and shopping in a regular environment. So that's resulted in better than expected comparable sales on the retailer side and that's encouraging for us as lenders. And a long winded answer to a question but I think the bank side of that is to feel that same optimism to be able to underwrite our credits as we typically do. In the meantime, are focused on deemed borrowing basis advancing maybe 50 or 60% of the cost value of that inventory rather than against the net liquidation value from an appraisal. With most structures being toggling into a regular way borrowing base at some point in the next three to six.

Guatham Deshpande:Okay. I have one question on underwriting and this one I'll direct it to Randy. Randy, can you tell us more about the technology in your underwriting of emerging consumer brands especially the ones that are selling direct to consumer?

Randy Mitzman:Sure. Yeah. Through our platform a company can connect their QuickBooks and accounting software along with their Shopify store and Shopify kind of tells us the most important data as to the strength of their online business. And so especially now where we know that the cost for advertising for these brands is lower online, so we're able to see in real time what's going on with these businesses. And for the companies that were previously just chasing top line revenue and kind of figuring out equity later that's not necessarily the answer.

Especially when we know that so many clients within our portfolio have been profitable the last few months, when we see a brand new account that connects their store to us. And we see all of these metrics, we were just not comfortable with chasing top line revenue anymore. And what's the path to profitability? How can a company be profitable on their first order? And those are the really important things that we're able to look at through our tech now that is just so much more important now than it ever was.

Guatham Deshpande:I'm going to move into some last couple of questions. I know, cognizant of time before I hand it over Lexi, rapid fire round. Are there any industries that you are staying away from? And that's for all four of you, maybe one each or maybe two each.

Charlie Perer: Oil and gas.

Heidi Ames:Yes. The same.

Guatham Deshpande:Okay. Alright

Michael Ganann:I can say probably hospitality is not high on a lot of people's lists. That's not my area of expertise but restaurants are not exactly a place to be lending money to now.

Guatham Deshpande:Yeah. Another question again, rapid fire. The Financial Times said that there will be more direct credit funds do you agree?

Michael Ganann:Yes.

Guatham Deshpande:Okay. I think we're probably coming on the hour to our end time and I'm getting a nudge from Lexi. Lexi I want to hand it over to you. We have a couple of questions that I think we'll follow up separately and address those questions with our attendees but if you can take it back home, I want to thank our panelists. Thank you for taking the time to get on early in the day for some of you and some of us replacing someone else due to either power outages or internet outages. But I really want to take this time to thank you for being here. I enjoyed asking you guys the question and I like the frankness and the experience that you brought to the responses.