Main Street Capital Corporation · NYSE:MAIN
Main Street Capital — IPO Roadshow (May 2022)
49 slides from Main Street Capital's IPO roadshow presentation, May 11, 2022
Slide 1: Investor Presentation First Quarter 2022
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 1 Investor Presentation First Quarter – 2022 Main Street Capital Corporation NYSE: MAIN mainstcapital.com Filed pursuant to Rule 433 Issuer Free Writing Prospectus dated May 6, 2022 Relating to Registration Statement No. 333 - 263258
Slide 2: Disclaimers
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 2 Disclaimers Main Street Capital Corporation (MAIN) cautions that statements in this presentation that are forward - looking, and provide other than historical information, involve risks and uncertainties that may impact our future r
Slide 3: Corporate Overview and Investment Strategy
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 3 Main Street Capital Corporation Corporate Overview and Investment Strategy 1 st Quarter – 2022
Slide 4: MAIN is a Principal Investor in Private Debt and Equity
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 4 MAIN is a Principal Investor in Private Debt and Equity Hybrid debt and equity investment strategy, internally managed operating structure and focus on Lower Middle Market differentiates MAIN from other investment firms (1) Capital
Slide 5: MAIN is a Principal Investor in Private Debt and Equity: Long-term focus
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 5 MAIN is a Principal Investor in Private Debt and Equity Long - term focus on delivering our shareholders sustainable growth in net asset value and recurring dividends per share Consistent cash dividend yield – dividends paid monthly
Slide 6: MAIN is a Principal Investor in Private Debt and Equity: Equity investments in LMM
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 6 MAIN is a Principal Investor in Private Debt and Equity Equity investments in LMM portfolio provide the opportunity to both grow net asset value (NAV) per share and generate recurring dividend income and periodic realized gains to s
Slide 7: MAIN Strategy Produces Differentiated Returns
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 7 MAIN Strategy Produces Differentiated Returns Enhanced Value Proposition - Three Ways to Win are Better Than One 1. Sustain and Grow Dividends • Efficient operating structure provides operating leverage to grow Distributable Net Inv
Slide 8: Historical Monthly Dividends, NAV and DNII Per Share
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 8 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 $22.00 $24.00 $26.00 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 NAV Per Share DNII and Dividends Per Share Mon
Slide 9: LMM Investment Strategy
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 9 LMM Investment Strategy Investment Objectives • High cash yield from secured debt investments (10.8% weighted - average cash coupon as of March 31, 2022); plus • Dividend income and periodic capital gains from equity investments Inv
Slide 10: LMM Investment Opportunity
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 10 LMM Investment Opportunity Large and critical portion of U.S. economy • 195,000+ domestic LMM businesses (1) LMM is under - served from a capital perspective and less competitive Inefficient asset class generates pricing inefficien
Slide 11: Private Loan Investment Strategy
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 11 Private Loan Investment Strategy Investment Objectives • Access proprietary investments with attractive risk - adjusted return characteristics • Generate cash yield to support MAIN monthly dividend Investment Characteristics • Inve
Slide 12: Middle Market Debt Investment Strategy
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 12 Middle Market Debt Investment Strategy Investment Objective • Generate cash yield to support MAIN monthly dividend Investments in secured and/or rated debt investments • First lien, senior secured debt investments • Floating rate d
Slide 13: Asset Management Business
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 13 Asset Management Business MAIN (1) is the investment adviser to and administrator of MSC Income Fund, Inc. (MSIF), a non - listed BDC • MAIN (1) provides asset management services, including sourcing, diligence and post - investmen
Slide 14: MAIN Regulatory Framework
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 14 MAIN Regulatory Framework Operates as a Business Development Company • Regulated by Securities and Exchange Commission - 1940 Act • Publicly - traded, private investment company Regulated Investment Company (RIC) tax structure • El
Slide 15: MAIN Corporate Structure – Internally Managed
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 15 MAIN Corporate Structure – Internally Managed “Internally managed” structure means no external management fees or expenses are paid, providing operating leverage to MAIN’s business; MAIN targets total operating and administrative c
Slide 16: MAIN Executive Management Team
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 16 MAIN Executive Management Team (1) Member of MAIN Executive Committee (2) Member of MAIN Investment Committee; Vince Foster, MAIN’s Chairman of the Board, is also a member of MAIN’s Investment Commit tee (3) Chief Investment Office
Slide 17: Monthly Dividends Per Share – Sustainable Growth
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 17 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 $2.20 $2.40 $2.60 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Monthly Dividends Monthly Dividends Per Share – Sustainable Growth Recurring monthly dividend has neve
Slide 18: Ordinary and Capital Gain Dividends 2017–2021
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 18 80% 80% 90% 92% 73% 20% 20% 10% 8% 27% $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 $180.0 $200.0 2017 2018 2019 2020 2021 Net Dividend, After Tax Hypothetical $1,000 Dividend $1,000 $1,000 $1,000 $1,000 $1,000 Tax at M
Slide 19: Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 19 Main Street Capital Corporation Investment Portfolio 1 st Quarter – 2022
Slide 20: Total Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 20 Total Investment Portfolio Includes complementary LMM debt and equity investments, Private Loan debt investments and Middle Market debt investments Total investment portfolio at fair value consists of approximately 49% LMM / 34% Pr
Slide 21: Total Portfolio by Industry
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 21 Total Portfolio by Industry (as a Percentage of Cost) (1) (1) Excluding MAIN’s Other Portfolio investments, the External Investment Manager, and short - term portfolio investments, each as des cribed in MAIN’s public filings, which
Slide 22: Total Portfolio: Invested Capital by Transaction Type and Geography
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 22 LBO/MBO Acquisition Recapitalization/ Refinancing Diversified Total Portfolio (as a Percentage of Cost) (1) Invested Capital by Transaction Type Invested Capital by Geography (2) 29% 15% 21% 13% 22% (1) Excluding MAIN’s Other Portf
Slide 23: LMM Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 23 LMM Investment Portfolio 75 portfolio companies / $1.8 billion in fair value • 49% of total investment portfolio at fair value Debt yielding 11.1% (1) (72% of LMM portfolio at cost) • 99% of debt investments have first lien positio
Slide 24: LMM Investment Portfolio credit statistics
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 24 LMM Investment Portfolio Median LMM portfolio credit statistics: • Senior leverage of 2.8 x EBITDA through MAIN debt position • 2.8 x EBITDA to senior interest coverage • Total leverage of 2.8x EBITDA including debt junior in prior
Slide 25: LMM Portfolio by Industry
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 25 LMM Portfolio by Industry (as a Percentage of Cost) Machinery, 11% Construction & Engineering, 8% Professional Services, 7% Energy Equipment & Services, 5% Diversified Consumer Services, 5% Distributors, 5% Containers & Packaging,
Slide 26: LMM Portfolio: Invested Capital by Transaction Type and Geography
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 26 Acquisition LBO/MBO Growth Capital Recapitalization/ Refinancing Diversified LMM Portfolio (as a Percentage of Cost) Invested Capital by Geography (1) 28% 23% 27% 11% 11% Invested Capital by Transaction Type (1) Based upon portfoli
Slide 27: LMM Portfolio Attributes Reflect Investment Strategy
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 27 Security Position on Debt Capital as a Percentage of Cost LMM Portfolio Attributes Reflect Investment Strategy High yielding secured debt investments coupled with significant equity participation = Attractive risk - adjusted return
Slide 28: Current Interest Term and Total Interest Coupon of LMM Debt Investments
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 28 Total Interest Coupon (1) 10% Current Interest Term and Total Interest Coupon of Existing LMM Debt Investments Original Term 11% Current Interest 13% Current Interest <10% Current Interest 12% Current Interest (1) Interest coupon e
Slide 29: Private Loan Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 29 Private Loan Investment Portfolio 79 investments / $1.3 billion in fair value • 34% of total investment portfolio at fair value Average investment size of $16.1 million (1) (less than 1% of total portfolio) Investments in secured d
Slide 30: Middle Market Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 30 Middle Market Investment Portfolio 36 investments / $397.3 million in fair value • 11% of total investment portfolio at fair value Average investment size of $12.3 million (1) (less than 1% of total portfolio) Investments in secure
Slide 31: Private Loan & Middle Market Portfolios by Industry
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 31 Internet Software & Services, 9% Commercial Services & Supplies, 9% Construction & Engineering, 7% Health Care Providers & Services, 6% Diversified Consumer Services, 5% Machinery, 5% Distributors, 5% Leisure Equipment & Products,
Slide 32: Private Loan & Middle Market Investments by Transaction Type and Geography
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 32 LBO/MBO Acquisition Recapitalization/ Refinancing Diversified Private Loan & Middle Market Investments (as a Percentage of Cost) Invested Capital by Transaction Type Invested Capital by Geography (1) 29% 9% 16% 15% 31% (1) Based up
Slide 33: Financial Overview
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 33 Main Street Capital Corporation Financial Overview 1 st Quarter – 2022
Slide 34: MAIN Financial Performance
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 34 MAIN Financial Performance Total Investment Income ($ in millions) $205.7 $233.4 $243.4 $222.6 $289.0 $79.4 2017 2018 2019 2020 2021 YTD 2022 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 $180.0 $200.0 $220.0 $240.0 $260
Slide 35: Long-Term Portfolio and DNII Per Share Growth
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 35 $106 $127 $159 $408 $658 $924 $1,286 $1,563 $1,800 $1,997 $2,171 $2,454 $2,685 $3,562 $3,691 $0.76 $1.19 $1.02 $1.25 $1.77 $2.09 $2.17 $2.29 $2.31 $2.39 $2.56 $2.76 $2.66 $2.26 $2.81 $2.96 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20
Slide 36: Efficient and Leverageable Operating Structure
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 36 Efficient and Leverageable Operating Structure “Internally managed” structure means no external management fees or expenses are paid Alignment of interest between management and investors • Greater incentives to maximize increases
Slide 37: MAIN Maintains a Significant Operating Cost Advantage
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 37 MAIN Maintains a Significant Operating Cost Advantage (1) Total operating expenses excluding interest expense (2) For the trailing twelve month period ended March 31, 2022 (3) For the trailing twelve month period ended March 31, 20
Slide 38: MAIN Income Statement Summary
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 38 MAIN Income Statement Summary (1) Positive percentage represents an increase and negative percentage represents a decrease to the Net Increase (Decrease) in Ne t A ssets (2) See Non - GAAP Information disclosures on page 48 of this
Slide 39: MAIN Per Share Change in Net Asset Value
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 39 MAIN Per Share Change in Net Asset Value (NAV) (1) See reconciliation of DNII per share to Net Investment Income per share on page 38 and Non - GAAP Information disclosures on page 48 of this presentation (2) Includes accretive imp
Slide 40: MAIN Balance Sheet Summary
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 40 MAIN Balance Sheet Summary (1) Includes $500.0 million of 3.00% Notes due July 2026, $450.0 million of 5.20% Notes due May 2024 and $185.0 million of 4.50% Not es due December 2022 ($ in 000's, except per share amounts) Q1 21 Q2 21
Slide 41: MAIN Liquidity and Capitalization
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 41 MAIN Liquidity and Capitalization (1) As of March 31, 2022, MAIN’s Credit F acility had $ 855 ..0 million in total commitments with an accordion feature to increase up to $ 1.2 billion; borrowings under this facility are available
Slide 42: Stable, Long-Term Leverage – Significant Unused Capacity
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 42 Stable, Long - Term Leverage – Significant Unused Capacity MAIN maintains a conservative capital structure, with limited overall leverage and low cost, long - term debt Capital structure is designed to correlate to and complement t
Slide 43: Long-term Maturity of Debt Obligations
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 43 MAIN (2) Internally Managed BDC’s (3)(5) Externally Managed BDC’s (4)(5) Long - term Maturity of Debt Obligations MAIN’s conservative capital structure provides long - term access to attractively - priced and structured debt facili
Slide 44: Interest Rate Impact and Sensitivity
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 44 Interest Rate Impact and Sensitivity The following table illustrates the approximate annual changes in the components of MAIN’s net investment income due to hypothetical increases (decreases) in interest rates (1)(2) (dollars in th
Slide 45: Significant Management Ownership / Investment
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 45 March 31, 2022 (3) Management (1) 3,125,030 $133,251,279 # of Shares (2) Significant Management Ownership / Investment Significant equity ownership by MAIN’s management team, coupled with internally managed structure, provides alig
Slide 46: MAIN Total Return Performance Since IPO
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 46 Notes: (1) Assumes dividends reinvested on date paid (2) The Main Street Peer Group includes all BDCs that have been publicly - traded for at least one year and that have total assets gre ater than $500 million based on individual
Slide 47: Executive Summary
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 47 Executive Summary Unique focus on under - served Lower Middle Market • Inefficient asset class with less competition • Unique market opportunity with attractive risk - adjusted returns • Generally first lien, senior secured debt in
Slide 48: Non-GAAP Information
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 48 Non - GAAP Information Distributable net investment income is net investment income, as determined in accordance with U .. S .. generally accepted accounting principles, or U .. S .. GAAP, excluding the impact of share - based comp
Slide 49: MAIN Corporate Data
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 49 MAIN Corporate Data Board of Directors Vincent D. Foster Chairman of the Board Main Street Capital Corporation J. Kevin Griffin Chief Strategy Officer MaineHealth Dwayne L. Hyzak CEO Main Street Capital Corporation John E. Jackson