Goldman Sachs BDC (GSBD) 6 May 222022 Q1 Earnings call transcript

Good morning. This is Erica, and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs BDC, Inc.

First Quarter 2022 Earnings Conference Call. Please note that all participants will be in a listen-only mode until the end of the call, when we will open up the line for questions.

call, remarks like may today's listeners remind begin today's that include we I to would our Before forward-looking statements. the are of represent by statements company's future regarding These events their nature company's uncertain the outside and control. belief that the conditions factors, The differ from from including those statements those possibly in of result in may as company's described indicated and a is company's a materially results forward-looking actual SEC financial filings. what number time-to-time of Inc. copyrighted This of material audio BDC Sachs is cast Goldman may reproduced, consent. and duplicated, our be rebroadcast without not or after market most include press www.goldmansachsbdc.com at can of supplemental of reconciliations comparable both Yesterday, the issued homepage directly closed, an to measures. which GAAP site which release earnings under non-GAAP the measures earnings the of be company the Web a found Investor on and Resources the posted our and presentation, section, documents company's be with SEC. the These filed quarterly report in with yesterday reviewed Form XX-Q the should conjunction on is purposes. call conference being X, Friday, May This for today, replay recorded XXXX, call Chi, I'll turn Sachs Co-Chief to Goldman of the BDC. now Officer Executive over Alex

our results. we we'll first Carmine Good everyone to Financial quarter excited to Executive our detail. line portfolio discussing Q&A. the finally, I'm Operating to And and for team. for I'll time hand us before management before conference joining I'll our earnings present over Gabriella the quarter begin to the our and a us results turn through Carmine describe Chief quarter David we're the call of first as call by today current company's it you, morning our Miller; financial take Skirnick, David overview in the the then with And Officer; market providing first my here activity for open Thank Officer, the Rossetti, to environment more brief thank Co-Chief for our you Erica. all Chief Officer. call. together

get income $X.XX. investment let's per first quarter with So to was share that, our results. Net

merger slightly quarter. share the a approximately share. from quarter fourth net connection of of of per accounting XX, as adjusted XX $X.XX impact $XX.XX acquisition asset with Excluding investment points decreased MMLC, income to in end the of with the basis value or $X.XX the per asset decrease March was first And

market Sachs. declared per As payable as our of after past March, a platform shareholders yesterday, XX, Americas, the respect the business together was closed into $X.XX Goldman of almost Board lending business the private to share to Division on this integrated a platform within XXX the direct focused we market. June dividend This XXXX. solely Asset credit brought the in broader professionals Management BDC With the announced our combined of integration of record investment

well of integration as Goldman for platform thus broader can the provide. benefits of opportunities, well the Sachs flow access company and of enhanced as see we've with the to significant going private begun of scale was It's additional far, the already primary One capital that investment to platform, the the integration. provide the very reasons a and broader the to credit

private excited we continue of discussing interest and integrated between the was look of investment the our investments result that We the increases the Russia to platform, already to weeks in credit these by and first continued highlighted the period is of quarter, BDC military part channels in Sachs. attractive which during rates. and labor of market pipeline and came We're Goldman materials are credit higher and benefits. of through volatility, the chain platform the a respect parts there a in quarters. within that other other disruptions, broader the number new continued With platform raw integrated one costs investments supply that Ukraine the experience within inflation, forward last just environment fact, conflict of the the benefits a In private highlighting further these coming we was that three had of quarter direct to

base and positive current assets we tailwind quarters, all earnings SOFR in substantially rates to floating where are our future are rising a LIBOR projections environment the for rate and rate this coming provide Given increases, of given will that our rate. anticipate

Lastly, the will shareholders of support decisions to we've continue actively best the fee we, make volatility team, this interests waiver. end, decided incentive shareholders. To to period extending that of our by management our serve this through

waive necessary, team's and least $X.XX an reflects With ability through quarter our believe we conditions. that, in We to of incentive the share adjusted to including Specifically, on it while turn voluntarily if amount a David of of net XXXX, achieve generate intend the basis. also me Miller. my at returns, stable and quarterly the the in strength income that on volatile per to market fourth to fees, let outlook management support the over company's Co-CEO, portfolio investment factoring

Thanks, Alex.

to During and in M&A the companies, investments in existing four investments companies, to quarter, new follow-on primarily investment XX million of retained we portfolio finance XXX million portfolio commitments, XX to new new activity. XX million

[ph] loans. Our one million, activity senior company down first totaling for on Sales partial a of by the investments driven new full in portfolio secured composition. commitments returned this remain to XXX investment repayment investment portfolio need quarter, more two and sell and lien companies repayment to focused portfolio in of normalized levels

our in comprised common preferred last-out second first-lien at in March value amount and combination in as investments unitranche and X.XXX senior of fair and XX.X% negligible stock unsecured well X.X% a warrants. total including of of XX, portfolio and of billion in lien debt, first in X.X% XX.X% a XXXX, debt secured as lien, were As X.X% loans,

bringing commitments investments XXX X.XX of total unfunded commitments to billion. XX, had of million March and as also We

end of companies average at quarter. end income QX the yield at investment QX across our quarter producing from of company the average QX. was unchanged investments debt X.X% investments to the prior XXX increased X.X%, the at different from The cost The operating X.X% total cost held at weighted of of our end, and the of in portfolio end As of weighted portfolio at XX industries. yield

in to Turning of to to the compared portfolio underlying EBITDA the of interest of at as overall quality. credit quarter end debt from companies to X.Xx, average is decreased quarter-over-quarter. The our companies our coverage end X.Xx The stable from investment quarter at were the portfolio weighted The companies average net performance was portfolio unchanged the quarter. our which prior X.Xx investment in prior quarter. weighted

believe that positions. While base expense breathing the companies base increased rates interest we stressing increase estimate significant increased of portfolio in are from cost underlying that finally, We of And X.Xx rates reduce XXX-basis have rising, to point would interest our room X.Xx. coverage without Non-accrual quarter asset and to portfolio X.X% slightly fair X.X% value, companies end turning respectively. to and quality. the for investments our supports as

we investment call, Company, [indiscernible] as of we Sachs. investment XXXX. IRR Hudson's in Bay the on exited in on company by Subsequent placed As our our fully QX indicated inception. since to the including fees QX XXXX, Convene acquisition non-accrual and last our yielded in Convene parent interest a After we and earnings part all X.X% accrued its expenses, X.XXx of investment monetized and

of income-producing of With forma call positioned with now and initial Pro was of and While that, believe to cost, portfolio the shareholders, the we're interest the to status expectations, our of now for the through reinvest the the the fair in financial non-accrual quarter in the we're and outcome assets. our capital results. end over turn fell respectively. disposition best the investment exit Carmine at to would because will satisfied I prior Convene short value represent walk X.X% to X.X% our

of of XXXX first quarter you, assets We of David. billion X.XX value of fair at with billion. outstanding the debt ended billion, X.XX Thank portfolio net investments and total X.X

were our notes notes facility. of on matured company's for XXX to the also at is funded the under net available repayment slight of debt X, equity money and ratio debt quarter end, end facility. ended XX% convertible of from under equity the prior secured out quarter. quarter revolving using unsecured the Subsequent million, compared X.XXx was At X.XXx April to the was quarter debt a with We to X.X% X.XXx secured of first QX. capacity end, borrowings reached the and their X.XXx, credit credit XXX increase company's to for million of which as the was quarter maturity. The revolving a outstanding net Average our in conversion capacity

In maturity date closed the which quarter an replaced August we from the end, a credit revolving addition, amendment to XXXX extended post facility to removed with LIBOR May SOFR our covenants XXXX secured and benchmark. benchmark financial certain

discount with GAAP non-GAAP intended results. to amortization to October also to Before results continuing XXXX make measures. This to measures statement, we purchase will non-GAAP MMLC. easier prior results or is the the reference reminder, as financial addition removed company's merger a income financial measures, compare our our These to impact adjusted from in to the financial certain

income after XX.X $XX.XX Distributions compared quarter as March $X.XX and XX.X fourth respectively, quarter. were On in GAAP XX.X a net million on net $XX.XX income due investment slight per for investment of million fourth compared interest net million, the GAAP income was a share quarter-over-quarter turn remarks. XX, that, in result was other to QX, levels XXXX. well tax XX, XX.X $X.XX quarter. decrease GAAP increase share accelerated as and in accretion to to per as lower $X.XX I'll prior value quarter For in quarter. closing was asset December as in respectively, $X.XX last compared was investment basis, Alex Net adjusted back compared reduction to and XXXX a expenses. compared and it this of investment the as to income a repayment as million, primarily the The quarter, Adjusted to totaled $X.XX. and net the as during in David to With

us thank positioned part economic current with on And call the market this Sachs. geopolitical economy segments for call. With broader that, Thanks, as and you about primarily to platform associated for today. lending prospects your results over that's the vulnerable the the that the Goldman the platform in Q&A. backdrop. company all the at are very open turn Carmine. a to lines portfolio current we of delivered the In appreciate attention the the backdrop, solid time Erica direct believe and the we excited joining less have I'll volatility quarter. Notwithstanding for of to conclusion, in We our We're

roster. now Q&A compile will a to we gentlemen, and the Ladies moment take

of the Fargo. with from comes Wells line question first Finian Your O’Shea

morning. Good everyone. Hi,

First question question this it at you're sounds and earning dividend The meet waivers it waivers, why sort is to seem on it. keeping dividend appreciating a and given committed extending another the you year those point the to very like. the that of fee year

yourself see touch there get yields if you'll to there today's of it's a are sort the leverage, And pull assuming just where on and of timeline? you combination levers sort what that the -- also driving of market, in meaningless So a from perspective? returns of

Good Fin. for morning, question. Thanks the Hi.

the now the reinvesting leverage a do today benefit And where And with increase earning be believe we're we to But third positioned we factors end support this of platform. or will we rising that back and fourth go Convene leverage the We in confident three in out. rate this not the We of the to Number through can all we that the senior from that's three, year. and cover we exactly lien interest going a very can here. that have sure two, We'll the think can pretty as factors on secured is We it in few the the half the to dividend is at portfolio environment, where incremental bit. going there's those platform. one, that tick-up dividend play interest Number quarter, On little feel the primarily waiver, too. where said, voluntarily which a think do can of waiving we able rates see proceeds put we're feel to number good dividend debt. the assets. probably the first year. play

with And just update parts Okay. couple grants and I to, ability there applications any then you update the a co-invest, you co-investment that on could if happening? platform the any that of Thanks. out now previously unable to is GCM That's if and were there's that on you integration know helpful. progress, invest provide an

Fin. question. Hi, It's for Alex. Thanks the

together businesses the bought we mentioned, I March. as early in So

of the that had And that able already bringing together. to we larger instance, particular for were the the investment by three weeks we in bringing a had the new within together. So businesses result of quarter. a part speak And one was we platforms deal

that a in investment. allowed so take us And leadership to position the

The the together. benefits one the we businesses with teams the going It's to are with in balance waiting SEC, relief thus the are that So that the the sheet will have. of for very how we to that's of allow which still the second We're exemptive respect alongside just pools very your been And well the of the confident would a examples very short to receive we very part co-invest we've question, diverse far. capital firm realize able of bringing from the order. that BDC. of familiar relief

So that's the update.

a I That's just that. guess small helpful. And then up follow on

change that entire it now, benefit additional main sort to correct verticals, of are the creating they're You proprietary those you funds the important origination which me platform and have By the having you final make does piece, the integration? origination platforms? I'm the where complete if different What's from now how understanding wrong, is or merged [ph]. the in all accounts, adding when

investing flexibility. us sheet the most Yes. balance capital we Fin, perspective, It's the gives flexible just have. ultimate from the my

Of and sheet. down go We balance course, the it's the up can firm capital.

able to have, so just more of A us side-by-side more the much specific being the have vehicles that is with lot mandates. loan flexibility. And deploy vehicles to BDC that other we give senior going

so it's going capital, to just sheet And the most on flexible. platform enhance as the it's able overall balance be the bring we when to

much. Okay, thanks That's for all so great. me, and

At this with time, Please there any are remarks. no questions. further continue closing

appreciate much much. you and your attending call, we very Thank thank very everyone you Again, the for support.

Thanks, everyone.

Inc. And you Goldman conference Sachs and earnings does ladies quarter this conclude your Thank the XXXX participation. gentlemen, BDC, for call. first

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