Question-and-Answer Session
Operator
(Operator Instructions) First with the line of David Fick with Stifel Nicolaus; please go ahead.
David Fick - Stifel Nicolaus
Good morning. Thank you for taking my call. The debt buybacks appear to be a very good use of capital, but I’m just wondering how you look at creating those gains versus your needs for capital, given the negative net investment proceeds that you’re seeing today. How do you think about managing that?
Jim Burns
David, I think we’re looking at conserving liquidity wherever possible, but we do think where we have some excess liquidity or where we have an asset sale that we can match up with some sort of liability retirement that makes sense. We’re going to go ahead and try to do that.
Obviously, we’re not in control of the supply and demand in the credit markets in terms of what is available to us. So it’s not something we can predict quarter-to-quarter very easily, but we have made a number of asset sales that have created a little bit of incremental liquidity and when possible, we’ll use that to continue to shrink the balance sheet.
David Fick - Stifel Nicolaus
Thank you. Jay, you indicated that on one hand you’re predicting worsening news on credit, on the other hand, you’re anticipating or maybe I’m hearing that you’re hoping, that you’re going to have repayment increase by the end of the year or early next year to offset your forward funding requirements. What indicators do you have that would show better performance on repayments?
Jay Sugarman
Let’s be a little bit careful. In terms of the fund flow flipping over, it’s as much the fact that the forward commitments are shrinking as it is repayments increasing. So I don’t think we’re relying entirely on repayments to increase. We just know the natural rundown of the unfunded forward commitments will help that indicator turn positive. We are still a little bit skeptical in terms of repayments, given the difficulty borrowers seem to have refinancing or accessing new equity to pay us down; second part of your question?
David Fick - Stifel Nicolaus
Let me just ask it a different way. What ratio of forward payment to maturities do you expect in your models?
Jim Burns
I think David, as we’ve kind of talked about the situation has been in flux for quite a while and what we try to do is see what the level of repayments are that are coming in, and to the extent that they are insufficient to meet our funding requirements, the additional fundings that we have to make on our construction projects or debt maturities or any other obligations. We’re filling those holes with asset sales and we’ll continue to manage it that way.
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