Main Street Capital Corporation · NYSE:MAIN
Main Street Capital — IPO Roadshow (May 2021)
48 slides from Main Street Capital's IPO roadshow presentation, May 10, 2021
Slide 1: Investor Presentation First Quarter 2021
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 1 Investor Presentation First Quarter – 2021 Main Street Capital Corporation NYSE: MAIN mainstcapital.com Filed Pursuant to Rule 433 Issuer Free Writing Prospectus dated May 7, 2021 Relating to Registration Statement No. 333-231146
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 res
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 1st Quarter – 2021
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
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
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 both the opportunity to 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 NAV Per Share DNII and Dividends Per Share Monthly
Slide 9: Lower Middle Market (LMM) Investment Strategy
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 9 Lower Middle Market (LMM) Investment Strategy Investment Objectives • High cash yield from secured debt investments (10.8% weighted- average cash coupon as of March 31, 2021); plus • Dividend income and periodic capital gains from e
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 • 175,000+ domestic LMM businesses(1) LMM is under-served from a capital perspective and less competitive Inefficient asset class generates pricing inefficiencie
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 • Invest
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 In May 2012, MAIN(1) entered into an investment sub-advisory agreement with the investment adviser to MSC Income Fund, Inc. (MSIF)(2), a non-listed BDC • MAIN(1) provided asset management services, includi
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 • Elim
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 Co-Founders and Executive Management Team
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 16 MAIN Co-Founders and Executive Management Team (1) Member of MAIN Executive Committee (2) Member of MAIN Investment Committee (3) Chief Investment Officer (4) Chief Operating Officer (5) Chief Compliance Officer • Co-founded MAIN;
Slide 17: Monthly Dividends Per Share – Sustainable Growth
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 17 Monthly Dividends Per Share – Sustainable Growth Recurring monthly dividend has never been decreased and has shown meaningful (86%) growth since IPO Based upon the current annualized monthly dividends for the third quarter of 2021,
Slide 18: Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 18 Main Street Capital Corporation Investment Portfolio 1st Quarter – 2021
Slide 19: Total Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 19 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 47% LMM / 27% Pr
Slide 20: Total Portfolio by Industry
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 20 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 described in MAIN’s public filings, which in
Slide 21: Total Portfolio by Transaction Type and Geography
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 21 LBO/MBO Acquisition Recapitalization/ Refinancing Diversified Total Portfolio (as a Percentage of Cost) (1) Invested Capital by Transaction Type Invested Capital by Geography (2) 22% 20% 24% 13% 21% (1) Excluding MAIN’s Other Portf
Slide 22: LMM Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 22 LMM Investment Portfolio 71 portfolio companies / $1,328.6 million in fair value • 47% of total investment portfolio at fair value Debt yielding 11.5%(1) (66% of LMM portfolio at cost) • 98% of debt investments have first lien posi
Slide 23: LMM Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 23 LMM Investment Portfolio Median LMM portfolio credit statistics: • Senior leverage of 3.0x EBITDA through MAIN debt position • 2.4x EBITDA to senior interest coverage • Total leverage of 3.1x EBITDA including debt junior in priorit
Slide 24: LMM Portfolio by Industry
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 24 LMM Portfolio by Industry (as a Percentage of Cost) Construction & Engineering, 10% Professional Services, 9% Energy Equipment & Services, 8% Machinery, 7% Software, 7% Tobacco, 5% Leisure Equipment & Products, 5% Food Products, 4%
Slide 25: LMM Portfolio by Transaction Type and Geography
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 25 Acquisition LBO/MBO Growth Capital Recapitalization/ Refinancing Diversified LMM Portfolio (as a Percentage of Cost) Invested Capital by Geography (1) 23% 21% 28% 11% 17% Invested Capital by Transaction Type (1) Based upon portfoli
Slide 26: LMM Portfolio Attributes Reflect Investment Strategy
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 26 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 returns
Slide 27: Current Interest Term and Total Interest Coupon of LMM Debt
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 27 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 28: Private Loan Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 28 Private Loan Investment Portfolio 63 investments / $741.2 million in fair value • 27% of total investment portfolio at fair value Average investment size of $12.2 million(1) (less than 1% of total portfolio) Investments in secured
Slide 29: Middle Market Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 29 Middle Market Investment Portfolio 40 investments / $418.1 million in fair value • 15% of total investment portfolio at fair value Average investment size of $11.4 million(1) (less than 1% of total portfolio) Investments in secured
Slide 30: Private Loan & Middle Market Portfolios by Industry
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 30 Aerospace & Defense, 9% Health Care Providers & Services, 8% Internet Software & Services, 7% Communications Equipment, 6% IT Services, 6% Machinery, 6% Commercial Services & Supplies, 6% Specialty Retail, 5% Oil, Gas & Consumable
Slide 31: Private Loan & Middle Market Investments by Type and Geography
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 31 LBO/MBO Acquisition Recapitalization/ Refinancing Diversified Private Loan & Middle Market Investments (as a Percentage of Cost) Invested Capital by Transaction Type Invested Capital by Geography (1) 21% 19% 20% 15% 25% (1) Based u
Slide 32: Financial Overview
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 32 Main Street Capital Corporation Financial Overview 1st Quarter – 2021
Slide 33: MAIN Financial Performance
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 33 MAIN Financial Performance Total Investment Income ($ in millions) $178.3 $205.7 $233.4 $243.4 $222.6 $62.8 2016 2017 2018 2019 2020 YTD 2021 $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 $260
Slide 34: Long-Term Portfolio and DNII Per Share Growth
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 34 Long-Term Portfolio and DNII(1) Per Share Growth MAIN has consistently grown Portfolio Investments and DNII per share ($ in millions, except per share data) (1) See reconciliation of DNII per share to Net Investment Income per shar
Slide 35: Efficient and Leverageable Operating Structure
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 35 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 36: MAIN Maintains a Significant Operating Cost Advantage
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 36 MAIN Maintains a Significant Operating Cost Advantage (1) Total operating expenses excluding interest expense (2) For the trailing twelve month period ended March 31, 2021 (3) For the trailing twelve month period ended March 31, 20
Slide 37: MAIN Income Statement Summary
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 37 MAIN Income Statement Summary (1) Excludes the effect of the $0.5 million realized loss recognized in the first quarter of 2020 on the repayment of the SBIC debentures issued prior to the date of the Main Street Capital II, LP acqu
Slide 38: MAIN Per Share Change in Net Asset Value
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 38 MAIN Per Share Change in Net Asset Value (NAV) (1) Excludes the effect of the $0.5 million realized loss recognized in the first quarter of 2020 on the repayment of the SBIC debentures issued prior to the date of the Main Street Ca
Slide 39: MAIN Balance Sheet Summary
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 39 MAIN Balance Sheet Summary (1) Includes adjustment to the face value of MSC II SBIC debentures pursuant to the fair value method of accounting elected for such MSC II SBIC borrowings for the period Q1 20; Total par value of MAIN’s
Slide 40: MAIN Liquidity and Capitalization
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 40 MAIN Liquidity and Capitalization (1) As of March 31, 2021, MAIN’s credit facility had $780.0 million in total commitments with an accordion feature to increase up to $800.0 million; Borrowings under this facility are available to
Slide 41: Stable, Long-Term Leverage – Significant Unused Capacity
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 41 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 the e
Slide 42: Long-term Maturity of Debt Obligations
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 42 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 facilities
Slide 43: Interest Rate Impact and Sensitivity
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 43 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 tho
Slide 44: Significant Management Ownership / Investment
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 44 March 31, 2021 (3) Management (1) 3,316,148 $129,827,194 # of Shares (2) Significant Management Ownership / Investment Significant equity ownership by MAIN’s management team, coupled with internally managed structure, provides alig
Slide 45: MAIN Total Return Performance Since IPO
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 45 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 greater than $500 million based on individual SEC
Slide 46: Executive Summary
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 46 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 invest
Slide 47: Non-GAAP Information
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 47 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 compensation expen
Slide 48: MAIN Corporate Data
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 48 MAIN Corporate Data Board of Directors Vincent D. Foster Executive Chairman Main Street Capital Corporation Arthur L. French Retired CEO/Executive J. Kevin Griffin SVP, Financial Planning & Analysis Novant Health, Inc. Dwayne L. Hy