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Golub Capital BDC, Inc. Announces a Series of Debt Funding Structure Initiatives Aimed at Reducing Borrowing Costs and Providing Additional Investment Flexibility
NEW YORK--(BUSINESS WIRE)-- Golub Capital BDC, Inc. (“GBDC” or the “Company”), a business development company (Nasdaq: GBDC), and Golub Capital, today
About this update from Golub Capital Bdc, Inc.
[{"type":"text","content":" NEW YORK--(BUSINESS WIRE)--\nGolub Capital BDC, Inc. (“GBDC” or the “Company”), a business development company (Nasdaq: GBDC), and Golub Capital, today announced a series of debt funding structure initiatives expected to reduce GBDC’s prospective borrowing costs and provide additional investment flexibility:\n\n\n\nOn November 18, 2024, GBDC completed a $2.2 billion term debt securitization, also referred to as a collateralized loan obligation (CLO)(“2024 Debt Securitization”). The secured notes were issued by the Company’s consolidated subsidiary Golub Capital BDC CLO 8 LLC and are backed by a portfolio of collateral obligations consisting of middle market loans.\n\n\n\nIn connection with the 2024 Debt Securitization closing, GBDC fully redeemed three of its existing term debt securitization financings: the $602.4 million 2018 Debt Securitization, the $908.2 million GCIC 2018 Debt Securitization and the $398.9 million GBDC 3 2021 Debt Securitization (collectively, the “Legacy GBDC and GBDC 3 Term Debt Securitizations”).\n\n\n\nOn November 15, 2024, GBDC also issued a notice of redemption to redeem the $386.6 million GBDC 3 2022-2 Debt Securitization in full, which is expected to occur on December 16, 2024.\n\n\n\nGBDC announced certain changes to existing bank lending relationships. The Company announced an increase of aggregate commitments under its senior secured revolving credit facility (the “JPM Credit Facility”) from $1,822.5 million to $1,897.5 million with the addition of one new bank lending relationship. Further, the Company announced that it expects to terminate the senior secured revolving credit facility (the “DB Credit Facility”) assumed in the acquisition of Golub Capital BDC 3, Inc. by merger.\n\n\n\nGBDC believes this series of transactions represents a meaningful evolution of GBDC’s debt funding structure and is compelling for GBDC stockholders for several reasons:\n\n\n\nReduction in borrowing costs: The 2024 Debt Securitization closing ($1.192 billion of senior AAA-rated notes priced at 3M SOFR plus 1.56%, and $171.6 million of junior AAA-rated notes priced at 3M SOFR plus 1.75%), redemption of the Legacy GBDC and GBDC 3 Term Debt Securitizations, and termination of the DB Credit Facility are expected to result in an immediate reduction in the Company’s overall weighted average cost of debt.\n\n\n\nExtensio...