Main Street Capital Corporation · NYSE:MAIN
Main Street Capital — IPO Roadshow (August 2021)
42 slides from Main Street Capital's IPO roadshow presentation, Aug 9, 2021
Slide 1: Debt Capital Markets Presentation Second Quarter 2021
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 1 Debt Capital Markets Presentation Second Quarter – 2021 Main Street Capital Corporation NYSE: MAIN mainstcapital.com Filed Pursuant to Rule 433 Issuer Free Writing Prospectus dated August 6, 2021 Relating to Registration Statement N
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: Main Street Capital Corporation 2nd Quarter 2021
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 3 Main Street Capital Corporation 2nd 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 Conservative
Slide 5: Investment Portfolio by Type of Investment
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 5 First Lien Debt, 95.1%, $1,954.5m Junior Debt, 4.9%, $101.6m Total Debt Investments $2,056.1 million Investment Portfolio – By Type of Investment(1) Equity, 27.5%, $818.7m Other Portfolio Equity, 3.3%, $97.5m Total Investment Portfo
Slide 6: Unique Investment Strategy
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 6 Unique Investment Strategy Middle Market • Larger companies than LMM strategy, with EBITDA between $20 - $100 million • First lien, senior secured debt investments • Floating rate debt investments • Large addressable market • Can pr
Slide 7: Portfolio Highlights
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 7 Portfolio Highlights(1) Middle Market • $434.7 million of total investments • 39 companies • $422.3 million of debt investments (97% of Middle Market portfolio) • 97% of debt investments are first lien(2) • Average investment size o
Slide 8: Business Development Company (BDC) Background
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 8 Business Development Company (BDC) Background Leverage • Regulatory restrictions on debt leverage levels require BDCs to maintain conservative leverage • Must maintain an asset to debt coverage ratio of at least 2.0x, unless the BDC
Slide 9: MAIN Capital Structure
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 9 MAIN Capital Structure (1) Debt amounts reflected at par value (2) Based on stock price of $41.09 as of June 30, 2021 Current capitalization ($ in 000's) June 30, 2021 % of Capitalization Cash 58,796 $ Debt at parent Credit Facility
Slide 10: Conservative Leverage
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 10 Conservative Leverage (1) Assets at the BDC/RIC parent level represent the collateral available to MAIN’s debt capital market investors (2) As of June 30, 2021, the Credit Facility includes total commitments of $855.0 million, matu
Slide 11: Conservative Leverage - Regulatory
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 11 Conservative Leverage - Regulatory Passage of the Small Business Credit Availability Act in December 2017 provides the opportunity for BDCs to obtain board or shareholder approval to access additional leverage by lowering the requi
Slide 12: Conservative Leverage - Excess Collateral Improves Over Time
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 12 Conservative Leverage - Excess Collateral Improves Over Time MAIN’s conservative use of leverage and use of equity to fund its growth results in significant excess collateral that provides protection to lenders MAIN’s management of
Slide 13: Key Credit Highlights
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 13 Key Credit Highlights • Core executive management team has been together as a team for 15+ years • Extensive investment expertise and relationships • Significant management equity ownership • Meaningful operating cost advantage thr
Slide 14: MAIN Co-Founders and Executive Management Team
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 14 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) (6) Chief Compliance Officer • Co-founded MA
Slide 15: Significant Management Ownership / Investment
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 15 June 30, 2021 (3) Management (1) 3,446,263 $141,606,947 # of Shares (2) Significant Management Ownership / Investment Significant equity ownership by MAIN’s management team, coupled with internally managed structure, provides align
Slide 16: Efficient and Leverageable Operating Structure
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 16 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 17: MAIN Maintains a Significant Operating Cost Advantage
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 17 MAIN Maintains a Significant Operating Cost Advantage (1) Total operating expenses excluding interest expense (2) For the trailing twelve month period ended June 30, 2021 (3) For the trailing twelve month period ended June 30, 2021
Slide 18: Stable, Long-Term Leverage – Significant Unused Capacity
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 18 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 19: Long-term Maturity of Debt Obligations
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 19 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 20: Interest Rate Impact and Sensitivity
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 20 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 21: At-The-Market (ATM) Equity Program
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 21 At-The-Market (ATM) Equity Program Provides permanent capital to match indefinite or long-term holding period for LMM investments Facilitates maintenance of conservative leverage position Issued equity is accretive to NAV per share
Slide 22: Lower Middle Market (LMM) Investment Strategy
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 22 Lower Middle Market (LMM) Investment Strategy Investment Objectives • High cash yield from secured debt investments (10.7% weighted- average cash coupon as of June 30, 2021); plus • Dividend income and periodic capital gains from e
Slide 23: LMM Investment Opportunity
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 23 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 inefficiencie
Slide 24: Private Loan Investment Strategy
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 24 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 25: Middle Market Debt Investment Strategy
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 25 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 26: Asset Management Business
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 26 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 27: Total Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 27 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 45% LMM / 29% Pr
Slide 28: Portfolio Snapshot – Significant Diversification
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 28 Portfolio Snapshot – Significant Diversification (1) Excludes Main’s short-term portfolio investments and the External Investment Manager, as described in MAIN’s public filings 12/31/2018 12/31/2019 12/31/2020 6/30/2021 Number of P
Slide 29: Portfolio Snapshot – Significant Diversification (cont.)
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 29 Portfolio Snapshot – Significant Diversification (cont.) (1) Excludes Main’s short-term portfolio investments and the External Investment Manager, as described in MAIN’s public filings 12/31/2018 12/31/2019 12/31/2020 6/30/2021 $ I
Slide 30: Portfolio Snapshot – Significant Diversification (cont.)
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 30 Portfolio Snapshot – Significant Diversification (cont.) (1) Excludes Main’s short-term portfolio investments and the External Investment Manager, as described in MAIN’s public filings 12/31/2018 12/31/2019 12/31/2020 6/30/2021 % o
Slide 31: Total Portfolio by Industry (as a Percentage of Cost)
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 31 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 32: Diversified Total Portfolio (as a Percentage of Cost)
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 32 LBO/MBO Acquisition Recapitalization/ Refinancing Diversified Total Portfolio (as a Percentage of Cost) (1) Invested Capital by Transaction Type Invested Capital by Geography (2) 21% 17% 23% 15% 24% (1) Excluding MAIN’s Other Portf
Slide 33: LMM Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 33 LMM Investment Portfolio 69 portfolio companies / $1,341.3 million in fair value • 45% of total investment portfolio at fair value Debt yielding 11.4%(1) (67% of LMM portfolio at cost) • 99% of debt investments have first lien posi
Slide 34: LMM Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 34 LMM Investment Portfolio Median LMM portfolio credit statistics: • Senior leverage of 2.7x EBITDA through MAIN debt position • 2.9x EBITDA to senior interest coverage • Total leverage of 2.7x EBITDA including debt junior in priorit
Slide 35: Private Loan Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 35 Private Loan Investment Portfolio 69 investments / $863.6 million in fair value • 29% of total investment portfolio at fair value Average investment size of $12.8 million(1) (less than 1% of total portfolio) Investments in secured
Slide 36: Middle Market Investment Portfolio
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 36 Middle Market Investment Portfolio 39 investments / $434.7 million in fair value • 15% of total investment portfolio at fair value Average investment size of $12.1 million(1) (less than 1% of total portfolio) Investments in secured
Slide 37: Non-GAAP Information
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 37 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 38: Appendix
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 38 Main Street Capital Corporation Appendix
Slide 39: MAIN Income Statement Summary
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 39 MAIN Income Statement Summary (1) Percent change from prior year is based upon impact (increase/(decrease)) on Net Increase (Decrease) in Net Assets (2) See Non-GAAP Information disclosures included on page 36 of this presentation
Slide 40: MAIN Per Share Change in Net Asset Value (NAV)
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 40 MAIN Per Share Change in Net Asset Value (NAV) (1) See reconciliation of DNII per share to Net Investment Income per share and Non-GAAP Information disclosures included on pages 37 and 39 of this presentation (2) Includes accretive
Slide 41: MAIN Balance Sheet Summary
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 41 MAIN Balance Sheet Summary (1) Includes $450.0 million of 5.20% Notes due May 2024, $185.0 million of 4.50% Notes due December 2022, and $300.0 million of 3.00% Notes due July 2026 ($ in 000's, except per share amounts) Q2 20 Q3 20
Slide 42: MAIN Corporate Data
mainstcapital.com NYSE: MAIN Main Street Capital Corporation Page 42 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