Question-and-Answer Session
Operator
(Operator instructions) We will go first to Gabe Poggi with FBR Capital Markets & Co.
Gabe Poggi – FBR Capital Markets & Co
Hi, good afternoon guys, great quarter. Two quick questions, and I am sure you will be getting questions on this afterwards, I don’t know if you guys mentioned or not or if you can mention, looking through the supplementals, the CLO-7-A looks to be real close to compliance. Can you comment on kind of where we are as of today relative to September 30? And then two, the question is – the second question is just thoughts on dividend going forward, this is a great quarter, and I know Mike you said there is going to be some volatility, but this is a big earnings number and just what your guys thought process is after posting such a big number? Thanks.
Michael McFerran
Sure. Gabe, CLO 2007-A, we can’t comment how it has performed. Since quarter-end, I don't think it has changed materially, as nothing significant has happened that we are aware of in the portfolio in the last few weeks. As to your point, it's capacity in the senior test, subordinate test is at a reasonable deficit. The prior remarks were hopeful that some of the mezz tranches are now more on a compliance in 2010. But as you know, there is still a lot of variables that can make that happen sooner or extend that out to a later date.
Bill Sonneborn
Just following on that, we are focused on that. The subordinated OC test, which is the one way that subordinated free cash flow restructure would begin accruing to the manager, we are about $58 million so of the end of the quarter short with respect to that test, which is about 3.5 points to 4 points of overcollateralization. That is within reach with good market environments and some opportunities with investment perspective to redeploy capital.
And your second question with respect to dividend, it is as we have talked about in the last quarter. There remains an absolute key objective of the management team which is to deliver liquidity profile where we can recommend or have a discussion with the Board on that subject. That is a Board level decision and that is all we can say on that question at this point Gabe.
Gabe Poggi – FBR Capital Markets & Co
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