Today’s conference call includes forward-looking statements and projections and we ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these forward-looking statements and projections. We do not undertake to update our forward-looking statements unless required by law. To obtain copies of our latest SEC filings, please visit our website or call Investor Relations at 914-286-6811.
The format for today’s call is as follows. Len will provide an overview, Bernie will provide an update on our capital structure, and Bill will summarize the financial, and then we will open the line for Q&A.
I will now turn the call over to our CEO, Len Tannenbaum.
Leonard TannenbaumThank you Stacey. The wall of liquidity engineered by virtually zero interest rates and the implementation of QE2 is clearly heading the economy. Though the Federal Reserve is indicating that inflation in tempered, don’t be misled. Companies are raising prices in order to pass along higher input costs. Wages are generally rising, and the underlying economy is starting to get back on track. The easy monetary stance of Federal Reserve will create a great deal of inflation that eventually will have to be addressed. We believe our approach to fix our liabilities and float our investments will bear fruit when the fed plays catchup later this year. We’ve enhanced our disclosure in the 10-Q with the amount of floating rate loans and the floors they are subject to, as well as the pro forma income increases we expect to see at various interest rate levels. As you’ll see, we realized an immediate benefit to our earnings as rates begin to rise. The highlight since our last earnings call was Fifth Street receiving an investment grade rating. This rating enabled us to lower our cost-to-capital further and ladder out our liability structure. Our recent convertible note offering, which is five-year unsecured, fixed rate debt at 5.375% allows us to enhance the security to our senior debt providers and prepare for an inevitable upward move in rates.