Paul O'Connor:

Welcome all to the Netwealth Portfolio Construction Podcast series. For new listeners, I'm Paul O'Connor and I'm the head of investments for Netwealth, which covers responsibility for the investment menus and the products Netwealth issues as a responsible entity.

On today's podcast, we have Helen Mason from Schroder Investment Management Australia Limited, or Schroder. Helen is the portfolio manager of the Schroder Australian High Yielding Credit Fund. And given that APRA has decided to phase out hybrids or Australian bank tier 1 securities, I thought we would discuss the impact of this decision on the broader Australian credit market and what options investors have who currently hold these securities.

Schroders PLC is a long-established and diversified asset manager who are based in the UK and are listed on the London Stock Exchange. Founded in 1804, the business employs over 6,000 people worldwide in 38 locations around Europe, America, Asia, Africa, and the Middle East. As of March 31, 2025, Schroder has total assets under management of 1.3 trillion dollars spread across their broad expertise in both public and private markets.

Schroder Australia is a wholly owned subsidiary of Schroder PLC. In terms of the Australian business at the end of May, Schroder managed 37.4 billion across Australian equities, fixed income and multi-asset and global equities, including 5.3 billion in Australian fixed income capabilities. The Australian High Yielding Credit Fund currently has 638 million in funds under management.

Helen leads credit portfolio management including being responsible for the investment decisions across the Australian High Yielding Credit Fund, the Schroder Australian Investment Grade Credit Fund and other credit sub-funds. She's also the portfolio manager for, and was instrumental in, the development of the Schroder Real Estate Debt Fund. Helen also undertakes credit research, analysis, and monitoring of companies issuing into the Australian credit market and commenced this role in August 2010. Helen has a Master of Applied Finance from Macquarie University, Sydney, Master of Human Resources from London Metropolitan University, and Bachelor of Economics and Politics from SOAS University of London.

There are seven Schroder funds available on the Netwealth super and IDPS investment menus covering Australian equities, international equities, Australian fixed interest, multi-sector, and alternative investment categories. The Australian High Yielding Credit Fund is currently being added to the investment menu, so it should be available over the next month.

In December 2024, APRA announced that it will phase out hybrid securities by 2032. Hybrids were originally introduced to support Australian banks' balance sheets in times of stress. However, the failure of several US and European banks in 2023 caused our regulator to reconsider their view on these securities and ultimately for APRA to conclude that they do not meet the regulatory objectives of stabilising a bank experiencing financial stress or supporting resolution to prevent a disorderly failure. As a result, APRA expects Australian banks to replace hybrids with Tier 2 capital at their next call dates.

Hybrid securities have been used by investors to provide a yield uplift over traditional fixed interest bonds and credit securities, and a large portion of the 43 billion in hybrid security issuance in the market are held by retail investors. But the issue with replacing them with Tier 2 capital securities is that they're effectively limited to wholesale investors. While some funds may offer exposure to Tier 2 capital through credit funds, direct access for retail investors is limited. So I'll certainly be interested in understanding Helen's view on how this will impact on investors' portfolios and the market.

Also as inflation and interest rates have moderated over the last 12 to 18 months, I'll also be keen to get Helen's thoughts on further opportunities across the Australian credit market and how she's positioning the Schroder portfolios. So maybe to commence with Helen, can you provide our listeners with a few comments on how you came to be a portfolio manager with Schroders?

Helen Mason:

Yeah. So I joined Schroders back in 2005 actually in London in a different role and moved across to Australia. So yes, unfortunately I am English. I joined the fixed income team in 2010 in Australia and basically worked my way from becoming a credit analyst all the way through senior analyst and then into the portfolio management role focused on credit from the high yielding space, so subordinated all the way through to the senior bonds from the major banks, for example. So a widespread coverage. But yeah, it's great to be part of the credit markets, which are growing quite significantly at the moment.

Paul O'Connor:

Equity markets are at all time highs and geopolitical risks are elevated. So what's your thoughts on the investment environment today?

Helen Mason:

There's a lot going on and it's not all bad, but certainly, it's tough, it's volatile, it's uncertain and everybody's talking about, it's pretty much all over the place. And although that can be a tricky investment environment, it does also present a lot of opportunity as well. So it's not all bad, like I said.

If you compare last year or 2023, '24 to this year, it's very different. Last year, we had this kind of Goldilocks investment environment. This year we've got lots of conflicting forces like sticky inflation in the US. We've got weakening global growth, much more macro and geopolitical instability of course. We actually have a running joke in the office at the moment that when discussing the next Trump tweet or the next Trump bombshell, we actually say, "Is crazy priced in yet?"

If you look at the volatility from what we had back in March with Liberation Day and compare that to the market reaction when Trump decided to bomb Iran after two days of deliberation as opposed to the two weeks that we actually expected, it was chalk and cheese. One was absolute chaos. The other one, markets were so quiet you'd probably think it was Christmas Day or New Year's Day. Let's just say at that point, I think crazy was already priced in. The ASX I think was down 30 basis points on the day, but nothing really to cry about. And then stocks actually rallied the following day, oil was down. So there really was this kind of nothing to see here reaction from markets.

So I would say probably now, the risk is a lot more focused back on tariffs, immigration, US inflation, global growth kind of moderating there. We've had positive numbers coming through from the US manufacturing PMIs, payrolls were actually okay, pretty strong. So much of this was actually expected and we've actually had spending brought forward in the US ahead of those tariff deadlines. So we still expect US growth to weaken from here, but inflation is probably likely to remain sticky until that pre-tariff spending flows through and that could take us all the way into 2026, to be honest.

What I will say is, though, markets kind of have this general apathy over certain events like the US-Iran tensions, it becomes a bit hard to tell what's going to cause the next volatility spike. So positioning is pretty tricky and it makes it even more important for investors to, I guess, nail themselves to their mast in terms of their core beliefs and how those core beliefs would play out through the respective asset classes that they're investing in.

Paul O'Connor:

So I guess ultimately too, as you're saying there, it's getting harder and harder to try and trade any of the Trump announcements or the broader geopolitical risks. So I guess it's really about sticking to your risk management framework on your portfolios there, Helen.

Helen Mason:

Absolutely, it's so important. And I think the point of actually being active, but being disciplined within that activity is really, really critical.

Paul O'Connor:

Fixed income appears to be more in the spotlight today than it has been in many years. So why now and what's happening?

Helen Mason:

I guess valuations are really attractive across the entire fixed income universe. We've got government yields over three and a half percent. We've got corporate bond yields over 5%. Higher yielding corporate bond yields are pushing 5.9% plus. So the cycle at the moment is pretty supportive of fixed income assets in general. We've got growth moderating and central banks are really having to step back in an ease and we've definitely seen that across Europe and Australia. Obviously some economies like Australia are now further into that journey than others, which is interesting because if you think back to last year and 2023, we were actually lagging the global rate cycle. So now we're almost ahead of that now. So it's a different environment.

The pick up, I guess, in what we're seeing because Australia is ahead of the other economies, I suppose particularly the US, we're kind of seeing that trade as being Australia over global at the moment, whereas last year we were thinking it was more of global over Australia. So given that the US is still pretty much on hold, going back to what I was saying about the inflation story there being still quite sticky and central banks not really being able to do much until they see some of that sticky inflation flowing through. And that could be 2026. It could be earlier, but it's somewhat up in the air.

And you mentioned there earlier that equities are at all time highs and yes, generally corporate credit in Australia is more attractive than equities, both domestic equities and Australian equities, especially when you look at the expected returns versus their probability of loss. I can give you an example. If you look at the yields on the CBA capital stack, you can see a real manifestation of that example, which is dividend yields on CBA equity is around 3.6% today versus a five-year CBA senior debt bond at 4.6%. And then that's 100 basis more than you're getting on the equity given the risk. And five-year Tier 2 paper is roughly about 5.2. It might be a little bit less today actually.

It isn't just the yields that are actually better, it's the risk profile. So you've got slowing growth or moderating growth in Australia, and that's generally bad for equities because you're likely to see weaker performance from your equity portfolio and definitely a lot more volatility. Whereas credit on the other hand is a lot more defensive and it's definitely lower volatility. So even against cash, fixed income is looking attractive. By the time investors start thinking about rolling over their next 12-month TD rate for example, you're probably going to be looking more at like 2.5%, especially as we're expecting the RBA to be cutting a little bit faster back to the neutral rate of 2.5 and 3% there. So we're actually forecasting about 75 basis points to go in for the rest of this year.

Paul O'Connor:

I think your comments there are about the CBA and what their debt securities are yielding versus the dividend of the ordinary share has been interesting. And I think it certainly plays into your earlier comment about the changing risk-return profile. The equity does not have a lot of room for error in its price, which hence with those stronger yields available on the capital securities, it's certainly I can understand that now would be a great time to be thinking more about your allocation to credit in a portfolio.

Helen Mason:

Yeah, and even if you look at the ASX 200, the ASX 300, the dividend yield there on those index at the moment are around 3.5%. So even if you're thinking passive equities, it's not really giving you much considering the risk.

Paul O'Connor:

The Australian economy appears sound at present, and as we've mentioned, bond yields are strong, but they have been moderating over the last 12 months. We've got inflation back within the RBA's target band of 2 to 3% and unemployment remains low, but GDP growth is sluggish. How do you think the Australian economy is currently looking?

Helen Mason:

Like you said, it's moderating, but it's actually looking okay if you think our June PMIs were pretty steady suggesting growth is actually stable. But yeah, I think there's a weaker bias across all the global economies at the moment, especially as we're seeing business conditions below average last month. So I'd say in Australia, we've already commenced that rate cutting cycle and as I said, we are expecting another 75 basis points to go in this month, August and possibly November, which will be supportive for businesses and consumers who are thinking investment and CapEx plans, for example, into the future. It means that companies themselves can get more comfortable with the costings of those plans into the future.

That also plays into our debt supply as well. So thinking about corporate credit issuance, it could actually lead to a better supply pipeline for us, which is what we like from a credit investment point of view. But I think overall, Australia's in a better position than the US because as you said, inflation is back within the RBA's target band and we do actually have greater monetary and fiscal flexibility in Australia. Australia's definitely our pick at the moment. So we're positioned for Aussie bonds to outperform global bonds versus how we were positioned last year, which was almost opposite that.

Paul O'Connor:

I'm taking from your comments there, in terms of asset classes that you have a positive view on. Given current economic conditions are an overweight to Australia, can we get a bit more granular into your view on those asset classes there and which ones will benefit from the current environment?

Helen Mason:

Fixed income in general will benefit through a declining rate environment, but Australian credit really benefits from this point in the cycle. You've got cash rates falling, so you've got bond price appreciation and investors therefore get their capital gains. But also with stabilising or moderating economic conditions and this high demand for yield and lower volatility, we're expecting to see decent, spread out performance this year.

And actually, the banks themselves have done most of the funding that they need to pre-fund what you were mentioning earlier, this bank hybrid transition and also the regulatory transition from 2018 to 2026 where the banks are required to hold more regulatory capital. Most of that has already been done, so we're not expecting to see a massive amount of Tier 2 issuance into the next six months. So that certainly does bode well for credit spread performance. So essentially what I'm saying there is investors are almost going to get the double whammy. They're going to get the spread performance and they can get their capital gains as well in this declining interest rate environment.

I guess the other point there is we've got a good starting point for valuations for Australian credit. Part of that is actually thanks to Trump. Because of the volatility in markets, spreads have actually remained quite wide in Australia and definitely versus the US credit markets, which have gotten exceptionally tight. And also noting that Australian credit is actually higher rated than its other global markets. So essentially in Australia, you're getting paid more credit risk premium for taking less risk within your local market in corporates that you actually know and love.

I guess the other point to note here is that Aussie credit in particular is pretty defensive, even compared with the global credit universe. So we have much less discretionary retail in Australia. Our index is chock-full of infrastructure, utilities, insurance companies, high quality defensive sectors. And a large proportion of those issuers actually operate in monopoly or duopoly type environments.

So as credit investors, we absolutely love regulation because it gives us that line of sight on future earnings and expenses. So if you think about a bond, we don't really care about any upside because in earnings you get the asymmetric profile of a bond in credit investing. You only get your money back is your best case scenario. So the greater clarity that we can have as credit investors on getting our money back, the better. And we've also got a really, really low default history in Australia as well, which is pretty unique when you look at the global numbers.

Paul O'Connor:

It's hard to gauge the impact of the Trump administration tariffs with many clearly being used as a leverage or bargaining tool in broader negotiations. Do you think the Australian credit market will be affected or has been affected by the Trump tariffs?

Helen Mason:

Yeah, it's a good question. I think indirectly by slowing global growth, we will be impacted. All countries are really expected to grow around trend with more that bias to the downside, I suppose. Overall, tariffs are not great for growth and they're not great for productivity either. So there's certainly parts of corporate Australia that will be impacted by this new trade environment, but it really does depend on a number of factors. So whilst we may not be as badly impacted in Australia, as I said, protection isn't great. It isn't healthy for global economies and it does tend to stymie growth and reduce business and consumer confidence, and that in itself increases market volatility.

But if you think about a business that's thinking, "I'm going to invest in my business into the future, I need to borrow some money to do that, I need to think about the economics of a project," in a trade environment that is pretty much all over the place like we have today, it's very, very hard to make those investment decisions for say the next five to 10 years. And so what happens essentially is that CapEx or capital expenditure just falls off a cliff. And what you can get left with is a big hole in productivity in the future because investments today have been deferred because of this weak, uncertain environment.

Paul O'Connor:

I think very valid comments there, Helen, because I have thought to myself that if you're the CEO of a global company or a US company and you're thinking of expanding, you'd be in two minds about what country you expand and where you're putting your CapEx in. And so it does create a little bit of that uncertain environment that I think you've articulated well there.

Helen Mason:

There was an example actually that I heard on the radio the other day that was talking about a company in the US that was diverting their manufacturing production arm into one of the Southeast Asian companies and away from China. And what he was saying was the delay in terms of the damage to productivity just moving his manufacturing arm. Because it doesn't take just a couple of months to set it up, it would be years to get everything in place and to get the machinery set up, the processes running. So even if businesses are investing today, we might not see those productivity gains for quite some time.

Paul O'Connor:

Just thinking about Australian credit, what types of investors do you think it's suited for and how would you think about it in an overall diversified portfolio and sitting next to other fixed interest strategies?

Helen Mason:

I mean credit is really suitable for investors who are looking for that solid and stable income. So if you're looking to take a little bit of your equity risk off the table or even as a replacement, as you mentioned before for bank hybrids, we've always called Australian credit the institutional investor's best kept secret. That's because corporate credit instruments pay regular fixed or floating coupons providing that steady, predictable income. And this is really valuable when you're thinking about the total portfolio.

So you've got your growth and defensive allocations and the way I see credit is sitting somewhere in between those. So while it's not as low risk as your government bonds, your TDs, your cash allocation, corporate credit tends to be a lot less volatile than equities, and bank hybrids I might add. And it offers a balance between that income generation, but also the capital stability that investors like.

Paul O'Connor:

I think that's one of the challenges with bonds and government bonds. When you keep an eye on like the Australian 10-year bond yield, it does vary around week upon week. So it would create some level of volatility, which can be, I guess, discomforting for some investors in thinking it's a defensive secure asset there. And that's where I guess floating rate credit does make a lot of sense to consider an allocation in a portfolio.

I mentioned bank hybrids in my opening comments. So what are the alternatives for investors and can these alternatives also provide an increased yield to complement the traditional fixed interest exposures in a portfolio?

Helen Mason:

Yes. Well, bank hybrids have had a few things going on lately and investors have absolutely loved them and partly because they've had good yield attached to them, they've got the franking component. And probably one of the big points is retail investors can actually buy them directly. Whereas if you think about the corporate and financial credit market, it's actually unavailable as direct securities to retail. And there's always been this perceived risk, like you said, that bank hybrids are low risk because they're banks at the end of the day.

Now when I say low risk, I'm not actually referring to is CBA going to default? I'm actually talking about the volatility. And in fact, dispelling a few myths there, they're not as low risk as you would consider when you actually look at the drawdown profile of bank hybrids over time. Firstly, the attractiveness of the yield is only because of the franking component, and I can give you an example.

So the wholesale Macquarie Tier 1 bond, so only available to wholesale investors, has a yield to call today of around 5.5% for a 2027 call. The retail Macquarie Bank hybrid with two years to call has a yield of 5.2%. So you're getting a 30 basis point uplifting yield in the wholesale bank hybrid. And they generally have been far more attractive than the retail ones. And that's because bank hybrids have been such a crowded space for such a long period of time.

Bank hybrids are not the safe haven as people thought they were. No security is actually safe unless it's cash, pretty much. So hybrids do sit above equity, but they rank well below senior bonds and also below subordinated Tier 2 debt in the capital stack. So in fact, one of the reasons APRA actually wanted to remove bank hybrids is because of this retail participation in quite complex securities, which are able to be written off or converted to equity, in an attempt to curb contagion and to stem losses and to prevent the government actually having to get involved in the event of some banking dislocation.

So the water is actually pretty murky when it comes to how the regulator would've actually assessed non-viability of a bank in Australia. And I think ultimately, it probably got put in the too hard basket to be honest, and was just simplified with common equity and Tier 2 as a replacement. And in fact, the Bank of New Zealand now is actually looking at whether they do the same thing with a review to be coming out at the end of this year as well.

Paul O'Connor:

It's interesting, just the retail take up of hybrids and I guess the attraction of the yield. But I'm with you that I've wasted or lost that many days of my life over the last 15 years trying to understand the conversion terms of a hybrid. And ultimately they are there to support the bank in times of duress and stress and the capital of the bank. So I think that has been lost on many investors and not quite understanding the real risks inherent in those securities. But obviously the regulator, I think to a degree, agrees with these comments with the fact that they're phasing them out.

Given the hybrids aren't called until 2032, what should investors think about now? And given many are trading at a premium to face value, should they be looking at potentially locking in the capital gain and divesting of some?

Helen Mason:

As of today, there's about 43 billion in major bank retail hybrids outstanding. And over a quarter, about 27% in fact of those outstanding securities will actually be called in two years time, and over three quarters, 76%, in under five years. So despite us hearing a lot about this 2032 final call date, that actually only applies to one hybrid, which is the NAB bond. It only has a billion dollars outstanding. So actually the time is ticking now and investors should be thinking about moving for a few reasons.

I'd say firstly, the liquidity of these securities will start to diminish, and there will be less buyers for hybrids as these bonds get closer to maturity. Some funds also have minimum maturity requirements, which makes these types of instruments ineligible. And generally, traders are less able to make profits from price movements because prices are already above par. So we're actually starting to see bid-offer spreads to really start to widen and it will actually become quite expensive to sell these. So you will actually have to take a bit of a hit on the capital price in order to get out of these securities.

Which actually brings me to my second point and that is the price which you mentioned. These securities are all trading significantly above par now, which means investors will face capital losses as we approach the call date. Because you're only going to get par value back, which is 100 cents in the dollar. And so if you're trading at 104, you will then make a capital loss as the call date approaches. And that's effectively going to eliminate any benefit any investor gets from a higher coupon.

So finally, I'd probably argue here that there are actually more compelling investments outside of bank hybrids and our High Yielding Credit Fund, for example, has delivered returns which are on par with hybrids, but offer a lower drawdown risk. It's higher quality and it has more diversification. So there are other options to investors out there. I'd say plainly, you actually don't need bank hybrids anymore. There are other options which offer better risk-return statistics, I suppose, but also more diversification and lower volatility.

Paul O'Connor:

Obviously default risk is the ultimate risk when investing in credit, but what other risks exist with Australian credit? We've been talking about hybrids and other credit securities can trade at premiums and discounts to par or face values. So do you see volatility as a risk over the short to medium term?

Helen Mason:

Yeah, I mean, as you mentioned, default is one risk, but in Australia we have very low defaults, and that's partly because we have credit, which is exceptionally high quality. In fact, I mentioned earlier, we're above global peers in terms of the index rating. I also mentioned that we've got exposures to sectors that are really stable and benefit from low competition and high regulation. So that gives us a lot of certainty around cashflow. But also our banking system is actually one of the highest regulated in the world, and APRA is very keen to keep it that way. So our banks are very basic by global standards. They rely heavily on making profits from very boring residential mortgages, high quality business lending. And that's great for credit investors, especially when we're buying the Tier 2 paper.

But in terms of volatility, credit actually has a much lower drawdown risk attached to it than Australian equities and the bank hybrids we've been talking about. So the risk is essentially a lot lower. I mean, are we safe? I think the risk of defaults is exceptionally small, but the risk of volatility is actually very, very real, I would say. Particularly in this trade environment with Trump, anything's possible.

I think Aussie credit is highly correlated with US credit markets and when these markets are dislocated, it is a bit of a technical risk, I suppose. Fundamentally, our financials and corporates are in a really good place. Their balance sheets are very, very well positioned. But when spreads move out on US credit markets, which there is a potential they will do, we are quite highly correlated to that. But I will say on the flip side of that, when spreads are wider, investors can access better carry and opportunities to buy at better levels when they present themselves.

So as I mentioned at the very beginning, volatility isn't all bad. It really does make the case for active management and staying ahead of economic indicators, nailing yourself to the mast when it comes to your investment philosophy and what drives your principles through making investment decisions. Market events can of course detract from fund performance, naturally, but they can also present really solid buying opportunities as well.

Paul O'Connor:

Maybe finally, Helen, can I get your thoughts or comments on the Australian credit market versus the, I guess burgeoning private credit market in Australia. I'm naturally seeing, probably almost every couple of weeks, new private credit funds coming to our platform and being added onto the investment menus?

Helen Mason:

Yeah, well, let's talk about that actually. So if you think about the wave of capital that actually has flowed into private credit, I think it's over 200 billion now in Australia alone, and that's in a really short period of time. I think that's in less than five years or seven years or something like that. So what's happening with more demand or more capital flowing in, that capital has to find a home in the form of new deals. And what's actually been happening is the volume of new deals that that money is finding a home is within commercial real estate.

I don't have an issue with commercial real estate. I really like it as an asset class, but I think when investors are actually thinking about private debt and what they're buying, I'm not entirely convinced they know that they're just buying commercial real estate assets. Or by way of example, Preqin data shows that 55% of the deals last year done in the private credit space were actually commercial real estate deals.

So a couple of things are happening there. A, you're very, very concentrated for starters, which is absolutely fine as long as you're aware of it. And secondly, the lending standards are deteriorating in these commercial real estate deals because there's just more capital out there competing for the deals themselves. So what happens, it becomes a borrower's environment as opposed to a lender's environment. So whereas before you might have been able to get a deal done at a 60% LVR, now you can't get that deal across the line unless it's an 80% LVR, which is of course more risky.

But the other thing that's happening is that their yields are coming down. So firstly, we are seeing interest rates decline in Australia, and so yields will be lower naturally. But the risk premium, so the amount that you're actually paid to take the risk within private credit, is also falling. I think investors need to be a bit aware of those dynamics that are happening in the private credit space.

APRA has obviously called out recently, which is what's been in the paper about the opaqueness and how the loans are actually being marked in terms of if, for example, a project that the loan is attached to maybe experiencing difficulty. The loans aren't necessarily being marked down to the new price effectively of where they should be given the risk that's inherent in that loan. So I think APRA is intending to do a lot of work on that into 2026.

But I think generally, if investors are looking at private debt today and having a portion of their exposure into private debt, I would call them out to say, have a look at public credit as well, because it's liquid, it's diversified, it's high yielding. There's lots of opportunities and it makes sense within a total portfolio perspective.

Paul O'Connor:

Yes, I think so. Some of your comments there have been, I guess, on issues I have been thinking about, and ultimately that's whether the weight of capital going into private credit is reducing or eliminating the illiquidity premium of what made it so attractive in the first place.

Helen Mason:

Yeah.

Paul O'Connor:

But I think your closing comments there about making sure that investors compare public credit versus private credit, and don't just look at them in isolation. Because ultimately, as you say, public credit is more liquid, it's more diversified by issuer.

Helen Mason:

Yeah, and if you're thinking about fixed interest, defensive credit allocation, maybe be thinking about that private credit more on the growth and just check that you're actually receiving the yield that you would expect to receive on something that is illiquid. And have a think about whether it makes sense to you that something that is private, the underlying assets are private, are being traded daily and whether that makes sense to you.

Paul O'Connor:

Helen, we could, I think, keep nattering for many more hours, but we better draw the podcast to a close. So firstly, I'd just like to thank you for your time and your insights this morning. They've been really interesting, your thoughts on the private credit market, the phasing out of hybrids, and really what the current investment opportunity is there for investors. So thank you for your time and insights.

Helen Mason:

No problem. Thanks for having me, Paul.

Paul O'Connor:

To the listener, thank you again for joining us on another installment of the Netwealth Portfolio Construction Podcast series. I hope you've enjoyed the discussion with Helen Mason from Schroder this morning. And I look forward to you joining us on the next podcast installment. Have a great day everyone. Thank you.