Goldman Sachs BDC (GSBD) 8 May 242024 Q1 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.

First Quarter 2024 Earnings Conference Call. Please note that all participants will be in listen-only mode until the end of the call when we will open up the line for questions.

Before we begin today's call, I would like to remind our listeners that today's remarks may include forward-looking statements. company's uncertain future company's and the their that, control. represent are nature, outside statements belief events regarding by These of the materially, time result of The may number filings. of in and results those a in forward-looking from described the including possibly SEC from those a company's indicated time what as financial statements factors, is to actual differ, condition company's copyrighted cast is material audio Sachs Inc. of This BDC, Goldman be not rebroadcast reproduced duplicated, consent. may and without or our

press the reviewed XX-Q replay be Resources closed, at posted company with home market release on recorded in quarterly report the non-GAAP measures is earnings both yesterday conference X, filed can and company's the section supplemental an which XXXX conjunction for page purposes. after of reconciliations measures. found presentation, the earnings to Investor Yesterday, directly includes www.goldmansachsbdc.com, be under comparable the website Form a most the issued the Wednesday, May being which GAAP call of SEC. of with our today, This should These on documents

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

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

was end from quarter value for $XX.XX, income quarter. of $X.XX fourth Our share was the net decrease share $X.XX. a the per asset of And or investment the per net X.X% approximately

XX.X% our in excess this up maintaining credits. net XX, Our of in exceeded decrease which of to during our a assets March again value all represent reflects to basis, On slight losses Consistent lien which fair quarters, quarter realized net bias as led a the first structure. loans investment dividend offset income NAV. the was with capital quarter, are but were that lien and investment our prior commitments higher the by first quarterly new towards credits unrealized the exposure

market shareholders dividend the $X.XX marks we with the paid after record in MMLC. Board totaling merger per excluding share dividend declared announced share we IPO, As company's a quarter the following special closed of payable per $X.XX XXXX of to XX, June XXXX. quarter of per share since yesterday, $XX.XX consecutive as the our our a This XXth of second dividends

We quarter, saw syndicated side from with credit to our namely conditions, in values. on larger cap with direct Now large broader the companies loan lenders, back of this significantly rebounded respect share first in the market enterprise platform. taking trend the market private

and we deploy provides. to and sponsors opportunities borrowers to their However, will direct credit where the value private find lenders believe capital continue certainty equity that attractive flexibility private

and maintenance and chemical platform lead infrastructure. our private where and as renewable components and plants, end with critical and and services other of example agent. facilities specialty lender and cleaning credit As Zeus, a largest their and markets. a connection another of to refining is of was DeBusk the lead provides served the DeBusk medical acquisition routine we dynamic, in USA lender administrative a an agent industrial USA EQT that supporting and loan refurbishments example in administrative industrial industrial manufacturer

Sachs Goldman backlog broader channeling the and on draw sponsor our benefit of to the existing private to through our activity platform platform, investment from franchise activity our or including from companies. poised the portfolio M&A significant are GSBD bank, addition add-on ability to refinancing that's credit our Given in

recent also expectations for benefit to that off and and still seeing exhibiting capital the led levels significant ago, starting our powder remain worth to private and platform ahead. in vintages market trillion of and acquisitions our sensible been private on LTVs. dynamics, have see activity supply-demand the XX-year which low we're a lower-than-normal and portfolio confident to legacy companies we nice overall continue restart leverage sponsor portfolio in quarter the $X.X to year of credit spread private, we're from and Again, to companies, sponsor to low up GSBD only monetize continued the leveraging harvest. investors sponsors Despite muted sponsor shareholders in private benefit XX% of It's catalyst and will the noting while LP activity years committed pickup fundamentals Pressure some with are serve equity strategic of remain that good to in compression volumes saw credit. we first and environment XXXX, sponsor what a relatively Sachs remained Goldman originations a We of broader line public credit in a dry quarters to from return year-over-year deal and were of as to has will M&A pressure a a mix M&A pipeline. a

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

Alex. Thanks,

repayment new the the million existing new we In of the the driven Sales upgrade quarter, position. lien of equity $XXX.X $XXX.X repayment companies. XX and in with of repayment companies. and portfolio an exit of During X to pleased investment and by portfolio totaled an commitments investments full are continue we one primarily to the activity we portfolio, originated full junior X quality particular, in million, as

composition. to Turning portfolio

lien in lien. unit investments As of portfolio comprised lien. XX.X% in last-out first senior total and including billion $X.X fair X.X% value, in X% March of were our loans, at XX, XXXX, tranche XX.X% secured first second

a unsecured in and stock X.X% in preferred warrants. common negligible a combination and debt and as of well As amount

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

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

the in weighted the the of average quarter debt-to-EBITDA you, in portfolio X.Xx our compared to quarter. first as The during Thank companies investment fourth net remained David. flat

the finally, in companies on line end portfolio our And compared to quarter a our both quarter. quarter portfolio flat at average weighted interest X.Xx EBITDA investment companies Importantly, as basis. fourth and have growth asset at in first the top quality. growth average turning weighted remained coverage of the to year-over-year The

first During and status. position a the was dental brands, position NPI, second quarter, both restructured Black, also for restored lien specialty lien known debt Vardiman accrual LCG that a as to

of investment on as XXXX total X.X% As portfolio from nonaccrual of March and as value XXXX. XXXX, portfolio XX, December investment X.X% fair XX, the X.X% at XX, status the total decreased of December to of amortized of from at investments cost X.X%

results. the turn to now over to our Stan will I financial call through Matuszewski walk

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

X.XXx. Our end our be to to target equity the quarter debt of below first ratio ending of X.XXx, leverage net was as the of which continues

and The closed a we proceeds notes our of was end, from quarter, used a in we secured under at available XXXX. approximately $XXX aggregate public down of unsecured a the During facility. of of secured principal pay interest the credit were million offering debt XX% the credit of of fixed The company's notes unsecured rate XXXX quarter of total bear amount had portion notes $X.XXX billion an sale X.XXX%. facility. due of our outstanding XXXX principal revolving capacity net revolving to the amount At debt,

February newly respectively. notes our to maturities the XXXX addition We XXXX separate unsecured necessary these to XXXX, January plan two and at have In we time. address due notes, in issued

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

was $XX.X adjusted and a quarter. net after-tax net in investment and was as per income respectively, and $X.XX. million, investment $XX.X quarter, million compared $XX.X On the GAAP prior income the to respectively, million, million For basis, $XX.X share first GAAP

adjusted of the ended MMLC, Total acquisition Excluding decrease in income annualized the equating of per discounts. net XX, in for decrease and X $X.XX net and income quarter an was accretion asset XX.X%. income respectively. upfront the XX, total income with was March and loan XXXX, origination XXXX The the by accounting share, $XXX.X in on a December yield million, primarily with $XXX.X fees investment connection accelerated was million driven months investment book of value unamortized for to merger investment investment impact

per quarter PIK at the during We investments. would income, an note, share. of restructuring did however, income certain total we a of as the increase in by primarily that see consistent driven percentage investment $X.XX Distributions remained

a on stability share income Our which approximately continued per provides our we million $X.XX basis dividend or on spillover is consistent believe since inception. taxable $XXX.X

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

joining performance outlook and the Stan, let's portfolio, remain earnings our about Q&A. line optimistic our Thanks, deployment into of With thanks, everyone, open environment the call. attractive We the current and for for opportunities. the that, for

take from we'll question Hughes Mark with And Instructions]. [Operator first Truist. our

me? Can Mark This Yes. you is Hughes. hear

good morning. Yes,

alluding pickup didn't a that that? get new full What pipeline. Could Alex, of in I meaning deal a referred hear. opportunities? didn't in quite Is your were there, to? just you activity you pipeline the you just to I repeat

Yes.

it of to the Just amount get the equity amount next dry record opportunities need especially sold picked up private think that that have, has due the want need to materially they will of is also firms new the really which about, that to if funds. and just deploy powder, vintage we've to companies pressure I to points portfolio the that have raise talking that DPI significant themes of but their firms been pipeline they

in higher our the quarters can quarter the X you at for activity you the strong pickup levels. saw it actually combined. more that's we in a so first of leading quarter, significantly if And see, very originations activity remains as then quarter, had pipeline to a previous And than second

And think volatility the of trying that activity also I ahead remain quite we so get come. sponsors and about can -- are to some election just of just optimistic deployment the

So we are, busy again, just expecting a quarter. quite

about you're what talked You seeing.

prognostications share? Any and of, market. You a talked syndicated strong between that in to in will When of where end direct about and equilibrium broadly lenders an yet? more rebound equilibrium are will in about syndicated we broadly kind the up there we again, get

Yes, just think imbalance, which, earlier now. most good upon pipeline It's a point, here are to it's It's comments And the the really picking seeing direct call by it's supply-demand about activity question. right I the board. determined your certainly, that to bottom hard think up. the it's and I sit the across really lenders again, based --

middle continues play so plays. the that's supply/demand on an the imbalance. really GSBD, where really banks not remember it the more market and help the and be BSL even should focused to what that And not that And ecosystem for also, market

see And so the you're that more going cap to large of I think sector. in

cap And of market, seeing clearly so it's the to our platform large but middle on for steadier. side stay the that we're continued

stress portfolio. is any number that, coverage interest of be curious that would it seeing like stable. below. then are commentary, know the reasonably at And the what tails, kind I you any of shared Down don't at you're the X companies if or but sounds in

of again, We again, very portfolio. before, percentage, the we but haven't it a single-digit -- not percentage stable. ticked reported our up. It percentage has remains it's Yes. And small very

from Adams Then go Sean-Paul Raymond next to we'll James.

hear you can me? Guys

Yes, I hear you. can

Perfect.

general bit? in is downtick and portfolio X the categories, portfolio like like the aggregate, shifting category up little the you a X portfolio? a went the looks a It of ladder the of looks more bit it in On aggregate, the X, little talk total you the but just category the share up. of Can about side, in portfolio health risk had

I mean stable. I overall, it's relatively say, would

have we this how of look actually quarter-over-quarter. As couple were from you a performance we kind X amendments kind a nonaccrual, with flow quarter. that Names come of we it which quarter. X, say this material many names between and heard, depending of was saw off on I -- at will pleased down we from would

we rest stability about look of relatively portfolio year. forward So the as we the of to good the feel the

there time. And questions [Operator the in Instructions]. other this are queue at no

in call, Thank Great. very into Well, listening you forward for deploy thank to look earnings our very continuing on you. much and attractive to this we environment.

does conclude call. your participation. that for And today's Thank you

disconnect. now may You