Our overall strategy is predicated on building yield-advantaged portfolios. We believe that the incremental yield or coupon in our portfolios should result in relative outperformance over a full market cycle. We focus primarily on investment grade and crossover corporates, government-sponsored agency securities and mortgage-backed/asset-backed securities. We analyze/monitor historical and current yield spreads within the context of the economic cycle while analyzing current and prospective business conditions. This determines what sectors/sub-sectors are overweighted as well as those that we wish to avoid. Piedmont’s security selection process entails both qualitative and quantitative factors. Qualitative credit analysis includes industry position/growth prospects, competitive and regulatory environment, management track record and rating agency trends and rationale. Our quantitative analysis includes security valuation/analytics, swap and default swap spreads, ratio analysis such as leverage, cashflow and coverage ratios. Financial comparisons and ratio analysis is conducted versus peers on a historical basis.