Goldman Sachs BDC (GSBD) 8 Nov 232023 Q3 Earnings call transcript

Good morning. This is Austin Neri, a member of the Investor Relations team for Goldman Sachs BDC, Inc., and I would like to welcome everyone to the Goldman Sachs BDC Inc.

Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Before we begin today's call, I would like to remind our listeners that today's remarks may include forward-looking statements.

These statements represent the company's belief regarding future events that, by their nature, are uncertain and outside of the company's control. factors, and indicated may as the in of number results from possibly a company's actual from a is described what those of SEC company's filings. financial time differ, condition materially, result time The to those, in including forward-looking statements

This is consent. of copyrighted Goldman and BDC, Inc. our audio not rebroadcast be without cast may duplicated, material Sachs reproduced or

which press can market the close, which found at presentation, the release earnings and comparable measures non-GAAP the an earnings website posted reconciliations the after include home Yesterday, both Investor the most GAAP issued of be on our and page directly supplemental a company measures. of to Resources of section under www.goldmansachsbdc.com,

company's SEC. XX-Q yesterday November quarterly report These conference be This X, purposes. documents recorded should on with XXXX, filed the reviewed today, the is with in being call replay Wednesday, for Form conjunction

to Goldman Co-Chief the turn Chi, Executive Alex now of Officer call I'll Inc. BDC, over Sachs

before finally, handing Good call for before to results. And Miller Tucker Co-Chief performance thank conference financial call. Austin. everyone, Greene our brief I'll and our to the environment third we'll in earnings today our David with the Chief David you, David to activity us open line and here more and off discussing and take of market Officer; results the current our a David the XXXX Financial turn to quarter joining over detail. our then I'll Q&A. through Tucker call then Officer; Miller, you us it portfolio Pessah describe our begin Chief Greene, quarter I'm by morning, Pessah, Thank providing Executive for third Operating overview Officer. for our

get to third with that, results. So quarter let's our

XX.X% investment income quarter's the prior over of $X.XX, the net increase was per $X.XX. Our an quarter for share

income annualized net impact by share, repayments merger yield the investment for MMLC, an asset primarily $X.XX equating XX.X%. value net during and quarter investment of per was the accounting the an in with discounted accretion positions. The on with quarter book the connection in related investment to Excluding of acquisition was in increase of adjusted income income increase driven

a As closed dividend as we XXXX. shareholders share Board to payable of declared announced after record per of December yesterday, $X.XX our market XX, the

of the was marks September of This for $XX.XX an paid $X.XX losses share the special our consecutive of which end primarily we as quarter. prior increase excluding an per $X.XX company's totaling increase share asset per XXth net increased in merger quarter. of $XX.XX the the quarter XXXX the value XXXX, offset to attributable IPO, dividend, This share MMLC. XX, to was per post unrealized Net from the the in dividends with income, increase of by partially investment since

market portfolio for loans secured lien invest of on a XXXX, in first basis, loans. the portfolio. debt value September the to of in fair continue higher a participation continued first investment secondary focus speaks originated which broadly XX, no On Again, as maintaining XX.X% quarter, directly are we this to lien, syndicated with only senior quality our

important over the deal We've progresses. evolves previously believe remain economic the while volumes the rates base As continues as next year will new quarters underwritings to particularly we expected interest our increase to longer. for to with as higher an evolve, portfolio caution that of expressed cycle with abundance few it's are proceed confidence

to the we opportunities lending across sizably seen XXX third reviewed more start more than platform, direct investment Americas quarter, During year. the which the is opportunities than our

opportunities so, we remains pipeline will that believe macroeconomic we closings private XXXX year be Although of headlines and quarter geopolitical recent delay robust, deal active existing an the new for may a extremely by expect timing and of current in our the post [ Goldman integration platform lender note Of the private spectrum. of Blue first the we ], Sachs one Brick across BDC credit refinancing complex. quarter, with the the credit made the of lead of this broader was investments GSBD or

[ and transaction for software Blue to an third customers borrower. Media the also where by platform a lead a and of is financing GSBD company's new was keeps very The origination another was a participate and credit the loan-to-value. sponsor. example RV the at new partial forma [ latest capital buyout is of the of of Brick Sachs GSBD quarter private pro recovery ] acquisition, existing a provider Goldman in enterprise data able involved lender business is financing backup a ] the which structure an attractive financial in the

a stands GSBD resetting our are credits into pricing, only market documentation and an economics orientation to downside covenants current with incumbent, to in high-quality vintage favorable we setting not to more risk align benefit from but and management. deploying where towards

to With Miller. co-CEO, over that, let my David it me turn

Thanks, Alex.

of million, portfolio $XXX.X portfolio the During in totaled the driven positions, full with capital pleased X first and full new lien remaining new companies. oriented well and repayment companies. in of quarter, existing particular, which excerpt continue we will in we lien the commitments activity In redeploying allow within originated targets. junior the leverage opportunities million new are our investments while repayment us to repayment X to $XXX.X investment by primarily Sales X X in

composition. Turning to portfolio

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

As operating XX.X% of weighted remained XXX portfolio at cost, The of yield companies at across held average of QX portfolio the of in our QX. industries. the different Amortized XX.X%. end end investment at investments cost quarter the XX was company end, at

I the Tucker overall discuss will now to quality. over turn to our credit Greene call

the X.Xx quarter. The of at companies Thank the David. net remained in you, second average portfolio investment our flat weighted debt-to-EBITDA in

as average average is the quarter. interest metrics and are weighted our our based rather rates year-over-year a to quarter important trailing last be have coverage calculate Where in we Importantly, companies top weighted would companies LTM continued a the The at use the to or quarter SOFR of our portfolio to note that calculation then than slightly from both on our coverage for ratio ratios to investment It basis. increase the X.XXx interest companies investment line portfolio on on we in basis. declined portfolio X.Xx. XX-month X.XXx EBITDA of end current our growth coverage

sensitivity. the creates which to continue coverage and The We quarterly held interest more rate in Fed flat, is slowing monitor SOFR increase stability.

to within reflection quality. to continue vintage repayment And in coverage that exposure new levels supported will of asset deployment legacy the the a book We also see finally, interest our be with environment. and as current turning activity

and of status on at investment amortized XX, percentage additional portfolio nonaccrual costs, X.X% position on one name of positions amounts new does quarter placed to placed status. dated value fair QX. a size two company change of was not and The this to As above. during the on constitute one was and September respectively. nonaccrual total nonaccrual nonaccrual to the Subsequent meaningful end, were a removed Investments XXXX, X.X% portfolio from

to walk will the to David our through turn now I over Pessah results. financial call

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

and facility. as X.XXx, debt-to-equity outstanding $XXX continues range X.XXx. QX ratio million of had net Our our target be to the which debt At end, the below of of end in amount approximately unsecured credit was under company's total our was debt revolving of capacity quarter available principal leverage XX% secured of ending of

quarter secured an to Subsequent XXXX end, revolving facility extension to to we October the maturity from of executed credit May XXXX. our

and February of to due XXXX, the separate address respectively. We unsecured maturities appropriate As XXXX time. a have January reminder, of we these X at notes in plan

we Before GAAP continuing in statement, measures. reference non-GAAP income to adjusted the or measures, reminder, a also certain addition as to financial

to from This purchase is company's financial measures the October MMLC. make These results our to impact intended non-GAAP results easier amortization remove compare discount to to results. merger financial with our prior XXXX the

million, $XX.X as net and $XX.X compared million respectively, QX, and $XX.X respectively, quarter. income and $XX.X to For adjusted prior GAAP million million, in the after-tax were investment

income a Distributions quarter. during and discussed net net investment at $X.XX was $X.XX net adjusted as was driven remained last primarily that repayment On was activity in compared share the income was investment income GAAP related consistent respectively, increase investment basis, earlier. per $X.XX, The share. to quarter by per and $X.XX $X.XX

our approximately dividend was consistent income per Our we $XX.XX on inception. quarter. spillover is provides September share a $XX.XX last value Net which XXXX, as on on basis, believe $XXX.X compared per million asset stability to continued taxable XX, since or $X.XX share

it to Alex With closing back that, turn remarks. I'll for

Thanks, David.

immediately September company upon on David the Stan congratulate CFO appointed announced to and has product November welcome since we been his new to the are XXXX for our has our On managing management pursue position David's our We the and been professional want on team ], and tendered as Goldman probably BDC at resignation effective to effective Matuszewski his all team aware, X, future. As resignation and the controllers at for platform. you entire XX. Stan XX the November wish Board best all opportunity. [ Treasurer, that a from David XX September Stanley

conclusion, With us for our line In the Q&A. thank call. Thank for open joining let's that, all you on you.

will with come And Securities. Fritscher [Operator our question first Instructions] from Maxwell Truist

sorry Hughes. on if And a of touch a mentioned BDCs joined Mark for in mentioned have you're I'm you in calling other this, but currently? I the quarter? spreads you so little seeing late, A couple can I'm contraction

lot for a the Thanks question.

further spread into average the quarters, think we $XXX rate spread So a probably more prior of kind we was average. for in middle on or XX We've I is ], In some seeing basis like bit of points, mid-XXXs standard [ saw the spread the more seen credit the quarter. of certainly of that plus where compression now well the the compression minus. fairway the are the

bit the bit compression. see more ] the is might of some see it's [ spread around more market larger of what $XXX but And you little might some middle credits, we're credits, a a for you wider, seeing. For

companies provide the coverage Okay. your And could Xx ratio? for of portfolio a below you are interest figure that percentage

a small that past, we but very percentage, haven't . it's the It's a -- percentage. disclosed single-digit in

our And with Raymond will question Adams next James. Sean-Paul

exited. some a the second on know possession the the are -- the positions know book. about you you remainder bit I what that Quick you guys book? lien talked And little What's of of had pipeline? guys lean lien question. said second your status you junior seeing I

we're a it's mean I actively pipeline to time, where expanding. not but Yes. something focus them we're pursuing. the from not at look We perspective, time it's from

XX%. prepared I think around as we comments, said book lien in our is first our right

to down today. portfolio So overall run the of the percentage very and . small legacy continues book is a

notice And Excellent. nonaccruals, which X didn't I if said were the new those? you companies

[ and Brazil ] Zodiac.

Got you.

been any as far there has [indiscernible] communication between As the as far sponsor as...

Yes.

we're club. just of lender So active sponsors the in with discussions the group the lenders amongst sizable that group behind in relatively the company, a are

this [indiscernible] on ecosystem are some we're a that. in surprised the wouldn't So position is sizable that the outcome, And don't you players but as And many leader is, might a relatively for with where discussions. in market like the us. know, in ecosystem we consolidation, it's more be come of online experiencing issues. active I to

Instructions] [Operator question of Derek our Bank from America. take We'll Hewett next with

that? -- impact of was were perspective, how on back a was answered. But you much little the on asked per what look could my bit from results, a about the you Most talk and a questions QX modeling share already basis of could

of impact. look about $X.XX because Thanks for was to roughly question. the XXXX COVID back. calculation it per the was -- look share cap the remote of last the That was of is back This It itself. the from

time, closing will That concludes session. I back this additional any or to the conference . you today's question-and-answer Chi, turn for at Mr. remarks.

much. call. everyone, Thank We then forward for year. to look interest joining support very the closing and . Thanks, our we the and appreciate you

concludes today's participation. for you Thank your call. This

may You disconnect. . now