Golub Capital Bdc, Inc. · NASDAQ:GBDC
Golub Capital Bdc — Q4 2020 Earnings Presentation
32 slides from Golub Capital Bdc's earnings presentation, Dec 1, 2020
Slide 1: Golub Capital BDC, Inc. Investor Presentation
GOLUB CAPITAL BDC, INC. INVESTOR PRESENTATION QUARTER ENDED SEPTEMBER 30, 2020
Slide 2: Disclaimer
Disclaimer Some of the statements in this presentation constitute forward-looking statements, Such forward-looking statements may include statements preceded by, followed by which relate to future events or our future performance or financial condition. The or that otherwise include the words “may,”
Slide 3: Summary of Financial Results vs. Preliminary Estimates
Summary of Financial Results vs. Preliminary Estimates 01
Slide 4: Summary of Financial Results vs. Preliminary Estimates
Summary of Financial Results vs. Preliminary Estimates FQ4 2020 Preliminary Estimate FQ4 2020 Actual Range (Filed October 19, 2020) Net Investment Income Per Share Net investment income per share $0.23 $0.22 $0.24 Amortization of purchase premium per share1 0.05 0.05 0.05 Adjusted net investment inc
Slide 5: GBDC Performance Drivers
GBDC Performance Drivers 0 Wi, GOLUB CAPITAL
Slide 6: Drivers of GBDC's Strong FQ4 2020 Earnings
Drivers of GBDC’s Strong FQ4 2020 Earnings Key Themes from FQ4 2020 Impact on GBDC The U.S. economy in calendar Q3 strongly Improved internal performance ratings1 rebounded from the heavily COVID- impacted CQ2 Decline in non-accruals2 GBDC portfolio companies generally continue to perform be
Slide 7: Improved Borrower Performance and Increased Sponsor Support Drive Positive Risk Rating Trends
Improved Borrower Performance and Increased Sponsor Support Continue to Drive Positive Trends in GBDC’s Risk Ratings − Steady upward portfolio migration into internal performance ratings 4-5 since the quarter ended March 31, 2020 as borrowers continued to perform better than initially expected − Inv
Slide 8: Low Net Realized Losses and Strong Unrealized Gains Drove a NAV Per Share Increase
Low Net Realized Losses and Strong Unrealized Gains Drove a NAV Per Share Increase from June 30, 2020 NAV Per Share Bridge Adjusted NII: $0.281 Adjusted Net Realized & Unrealized Gain: $0.291 $0.05 ($0.05) $14.33 ($0.29) $0.36 $0.23 $14.05 ($0.02) 6/30/20 Net Investment Reversal of FQ4 2020 Net Real
Slide 9: Navigating COVID-19: Strategic Response Update
Navigating COVID-19: Strategic Response Update 03
Slide 10: COVID-19 Strategic Response Update
COVID-19 Strategic Response Update GBDC continues to execute on its three key goals for navigating the COVID-19 crisis: 1. Proactively manage its highly diversified, first lien, senior secured investment portfolio 2. Optimize the balance sheet 3. Capitalize on attractive new investment opportunities
Slide 11: Proactive Portfolio Management to Minimize Net Realized Credit Losses
Proactive Portfolio Management to Minimize Net Realized Credit Losses Golub Capital has taken measures to address the economic and market impact of COVID-19 on GBDC’s portfolio companies Phase 3 Goals Phase 3 Update ✓ • Design and execute game plans • Executed 90+ credit-enhancing Phase 1: for each
Slide 12: GBDC's Balance Sheet is Well-Positioned for the Current Environment
GBDC’s Balance Sheet is Well-Positioned for the Current Environment − GAAP leverage of 0.85x (regulatory leverage of 0.76x) as of September 30, 2020 − Substantial liquidity (cash and borrowing capacity) of nearly $500 million − Resilient and flexible debt capital structure that was enhanced by the f
Slide 13: GBDC Is Well-Positioned to Navigate COVID-19
GBDC Is Well-Positioned to Navigate COVID-19 1. Managed by Golub Capital, a platform with over $30 billion of capital under management and over a 25-year history of successful investing in the middle market 2. Conservative investment strategy focused on first lien, senior secured loans to resilient
Slide 14: Summary of Financial Results for the Quarter Ended September 30, 2020
Summary of Financial Results for the Quarter Ended September 30, 2020 04
Slide 15: Summary of Quarterly Results
Summary of Quarterly Results FY 2019 FY 2020 FQ4 2019 FQ1 2020 FQ2 2020 FQ3 2020 FQ4 2020 Net Investment Income Per Share Net investment income per share $0.37 $0.24 $0.24 $0.23 $0.23 Amortization of purchase premium per share1 0.02 0.09 0.09 0.05 0.05 Accrual for (reversal of) capital gain incentiv
Slide 16: Portfolio Highlights – New Originations
Portfolio Highlights – New Originations New Originations Data and Net Funds Growth − Total investments at fair value decreased by approximately 0.3%, or $12.2 million, during the quarter ended September 30, 2020. − As of September 30, 2020, we had $41.6 million of undrawn revolver commitments to por
Slide 17: Portfolio Highlights – Portfolio Diversity as of September 30, 2020
Portfolio Highlights – Portfolio Diversity as of September 30, 2020 FY 2019 FY 2020 Investment Portfolio Statistics FQ4 2019 FQ1 2020 FQ2 2020 FQ3 2020 FQ4 2020 Investments in Portfolio Companies at Fair Value (000s) $4,169,287 $4,329,238 $4,210,215 $4,250,370 $4,238,210 Investments in Senior Loan F
Slide 18: Portfolio Highlights – Portfolio Diversity as of September 30, 2020
Portfolio Highlights – Portfolio Diversity as of September 30, 2020 Investment Portfolio $4,238mm // 254 Investments – Average Size <0.4% Portfolio Composition by Seniority Diversification by Obligor Top 10 1% 2% Investments 18% 15% First Lien Traditional Senior First Lien 97% One Stop Top 25 First
Slide 19: Portfolio Highlights – Economic Analysis
Portfolio Highlights – Economic Analysis Economic Analysis 10.00% 9.1% 9.2% 9.2% 8.8% 9.00% 8.4% 8.2% 8.1% 8.8% 7.8% 8.00% 8.6% 8.6% 8.4% 8.0% 7.8% 7.7% 7.00% 7.4% 6.00% 5.0% 5.0% 5.1% 4.8% 4.8% 4.9% 5.00% 4.5% 4.5% 4.00% 4.3% 4.2% 4.2% 4.0% 3.9% 3.7% 3.00% 3.2% 2.8% 2.7% 2.00% 2.6% 2.3% 2.1% 1.9% 1
Slide 20: Portfolio Highlights – Credit Quality
Portfolio Highlights – Credit Quality Credit Quality – Investment Portfolio − Non-accrual investments at September 30, 2020 as a percentage of total investments at cost and fair value declined to 2.4% and 1.7%, respectively. During the quarter ended September 30, 2020, the number of non-accrual inve
Slide 21: Portfolio Highlights – Portfolio Ratings
Portfolio Highlights – Portfolio Ratings Credit Quality – Investment Portfolio − Due to continued better than expected borrower performance, the percentage of risk rated “3” investments decreased to 19.7% of the portfolio at fair value as of September 30, 2020 from 22.3% as of June 30, 2020. Interna
Slide 22: Quarterly Statements of Financial Condition
Quarterly Statements of Financial Condition FY 2019 FY 2020 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 September 30, 2020 (Dollar amounts in 000s, except per share data) (audited) (unaudited) (unaudited) (unaudited) (audited) Assets Investments, at fair value $4,292,932 $4,448
Slide 23: Quarterly Operating Results
Quarterly Operating Results For the three months ended FY 2019 FY 2020 September 30, December 31, March 31, June 30, September 30, 2019 2019 2020 2020 2020 (Dollar amounts in 000s, except share and per share data) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Investment Income Interest
Slide 24: Financial Performance Highlights
Financial Performance Highlights Quarterly Return on Equity and Quarterly Distributions (Last 5 Years) 6.7% 4.0% 2.4% 2.5% 1.8% 2.3% 1.9% 2.2% 2.4% 2.2% 2.3% 2.2% 2.4% 2.3% 1.9% 1.9% 2.0% 2.2% 2.1% 1.6% $0.57 -10.5% $0.46 $0.44 $0.40 $0.32 $0.32 $0.32 $0.32 $0.32 $0.32 $0.32 $0.32 $0.32 $0.32 $0.32
Slide 25: Long History of Strong Shareholder Returns
Long History of Strong Shareholder Returns Investors in GBDC’s 2010 IPO have achieved a 9.7% IRR on NAV1 $31.94 $0.58 $13.30 $14.63 $3.732 $14.33 Mar-11 Mar-12 Sep-10 Mar-13 Dec-10 Sep-11 Mar-14 Apr-10 Jun-10 Dec-11 Sep-12 Mar-15 Jun-11 Dec-12 Sep-13 Mar-16 Jun-12 Dec-13 Sep-14 Mar-17 Jun-13 Dec-14
Slide 26: Liquidity and Investment Capacity
Liquidity and Investment Capacity Cash and Cash Equivalents − Unrestricted cash and cash equivalents and foreign currencies totaled $25.1 million as of September 30, 2020. − Restricted cash, cash equivalents and foreign currencies totaled $159.3 million as of September 30, 2020. Restricted cash is h
Slide 27: Debt Capital Structure
Debt Capital Structure* Key Funding Vehicles Debt Outstanding Undrawn Funding Source Commitment Par Commitment Reinvestment Period Stated Maturity Interest Rate1 Securitizations: 2020 Debt Securitization $ 189,000 $ 189,000 $ - November 5, 2022 November 5, 2032 3 Month LIBOR + 2.44% 2018 Debt Securi
Slide 28: Common Stock and Distribution Information
Common Stock and Distribution Information Common Stock Data1 Fiscal Year Ended September 30, 2019 High Low End of Period First Quarter $19.01 $16.38 $16.49 Second Quarter $18.65 $16.62 $17.88 Third Quarter $18.43 $17.34 $17.80 Fourth Quarter $18.97 $17.72 $18.84 Fiscal Year Ending September 30, 2020
Slide 29: Appendix: Endnotes and Illustration of the Purchase Accounting for the GCIC Acquisition
A Appendix: Endnotes and Illustration of the Purchase Accounting for the GCIC Acquisition
Slide 30: Endnotes – Non-GAAP Financial Measures
Endnotes – Non-GAAP Financial Measures 1. On September 16, 2019, the Company completed its acquisition of GCIC. The merger was accounted for under the asset acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805-50, Business Combinations — Related Issues. U
Slide 31: Accounting Treatment of the Purchase Premium
Accounting Treatment of the Purchase Premium Recognize One- Acquisition of Determine GBDC’s Time Write-Down GCIC Assets at a Cost Basis in of Purchase Premium Acquired Assets Premium Write Down to Fair Value One-Time Purchase Unrealized Loss Premium on Purchase Premium GBDC Cost Basis = Purchase Pre
Slide 32: Illustrative Income Statement Impact and Supplemental Non-GAAP Financial Measures
Illustrative Income Statement Impact and Supplemental Non- GAAP Financial Measures As a supplement to U.S. generally accepted accounting principles (“GAAP”) financial measures, the Company is providing the following non- GAAP financial measures: A B Expected to be equal and offsetting amounts A Purc