A discussion on high yield valuations, AI's impact on software credit, and portfolio positioning in a higher-rate environment. Key Takeaways: Tight spreads are justified: The HY benchmark is better rated than ever — ~60% Double B's — as private debt has absorbed the lower-quality, sponsor-driven deals that once weighed on the market. AI is a real credit risk in software lending: Niche software borrowers make up ~15% of leveraged loans and ~20% of some private debt funds, and face genuine disintermediation risk that could make refinancing by 2028 difficult. Selectivity drives the edge: Running a concentrated portfolio of ~150 issuers — with the freedom to say no on valuation or fundamentals — keeps the approach distinct from peers constrained by benchmark composition.