Barings Bdc, Inc. · NYSE:BBDC
Barings Bdc — Q2 2023 Earnings Presentation
24 slides from Barings Bdc's earnings presentation, Aug 10, 2023
Slide 1: Barings BDC, Inc. Second Quarter 2023 Earnings Presentation
Barings BDC, Inc. Second Quarter 2023 Earnings Presentation August 9, 2023 Barings‐Public
Slide 2: Disclaimers & Cautionary Notes Regarding Forward-Looking Statements
Disclaimers & Cautionary Notes Regarding Forward-Looking Statements Cautionary Notice: Certain statements contained in this presentation are "forward-looking" statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they
Slide 3: Agenda
Agenda ERIC LLOYD 2Q 2023 HIGHLIGHTS (LLOYD) What were the summary points of the quarter? IAN FOWLER BARINGS BDC MARKET UPDATE & INVESTMENT PORTFOLIO (FOWLER) Update on the portfolio performance. ELIZABETH MURRAY BRYAN HIGH BARINGS BDC FINANCIALS (MURRAY) A walk through the balance sheet, income sta
Slide 4: 2Q 2023 Highlights
2Q 2023 Highlights Barings‐Public
Slide 5: Second Quarter 2023 Highlights
Second Quarter 2023 Highlights NET ASSET VALUE ORIGINATIONS Net asset value (NAV) as of June 30, 2023 was $11.34 per share as Total originations during the quarter were $66 million, while sales and compared to $11.17 as of March 31, 2023 repayments totaled $135 million, for net repayments of $70 mil
Slide 6: Selected Financial Highlights
Selected Financial Highlights Balance Sheet Highlights 2Q 2023 1Q 2023 4Q 2022 3Q 2022 2Q 2022 Investment Portfolio, at Fair Value $2,505.9 $2,556.1 $2,448.9 $2,332.5 $2,389.1 Total Debt Outstanding (Principal) $1,497.1 $1,494.1 $1,454.1 $1,376.0 $1,539.4 Total Net Assets (Equity) $1,207.6 $1,205.0
Slide 7: Barings BDC Market Update & Investment Portfolio
Barings BDC Market Update & Investment Portfolio Barings‐Public
Slide 8: Investment Activity
Investment Activity Summary of investment activity during the quarter ended June 30, 2023 Middle Market Loans: • Net decrease in investments of $61 million • Total MML fundings were $36 million • Includes $5 million in three new portfolio companies • Includes $31 million in 36 existing portfolio com
Slide 9: Portfolio Bridge – 1Q23 to 2Q23
Portfolio Bridge – 1Q23 to 2Q23 In the second quarter we originated $36 million of Middle-Market Loans, made $30 million of Cross-Platform Investments (including JVs), and had $135 million of sales/paydowns $ in millions. Total may not foot due to rounding. Excludes escrows received. 9 Barings‐Publi
Slide 10: Aggregate Portfolio Characteristics (as of June 30, 2023)
Aggregate Portfolio Characteristics (as of June 30, 2023) Middle Market Cross Platform Acquired MVC Acquired SIC Total Total Investments and Commitments ($mm) $1,686 $728 $77 $257 $2,748 Unfunded Commitments ($mm) $185 $51 $0 $6 $242 Total Investments at Fair Value ($mm) $1,501 $678 $77 $251 $2,506
Slide 11: Portfolio Rotation
Portfolio Rotation While the acquisitions of MVC Capital and Sierra Income diversified the Barings BDC portfolio, our core focus remains first lien investments $2,179MM $327MM $2,506MM 100% 90% 80% 38% 70% 68% Equity & JV 72% 60% Structured Second Lien & Mezz 50% 23% First Lien 40% 9% 30% 10% 8% 20%
Slide 12: Top 10 Investments
Top 10 Investments Top 10 Investments (as of June 30, 2023) Principal % of Issuer Moody's Industry Segment Cost Fair Value Amount Portfolio Banking, Finance, Eclipse Business Capital, LLC Cross Platform $8,182 101,633 $154,012 6.1% Insurance and Real Estate Security Holdings B.V. Capital Equipment M
Slide 13: Barings BDC Financials
Barings BDC Financials Barings‐Public
Slide 14: Net Asset Value Per Share (NAV) Bridge – 1Q23 to 2Q23
Net Asset Value Per Share (NAV) Bridge – 1Q23 to 2Q23 BBDC’s NAV per share increased in 2Q23 to $11.34 from $11.17, an increase of 1.5%, driven primarily by net investment income exceeding the dividend, unrealized appreciation on investments and share repurchases Total may not foot due to rounding.
Slide 15: Barings BDC Portfolio Summary as of June 30, 2023
Barings BDC Portfolio Summary as of June 30, 2023 2Q 2023 Portfolio Summary 2Q 2Q 2Q 2Q Unrealized Unrealized Unrealized Unrealized App (Dep) - App (Dep) - App (Dep) - App (Dep) - Per Par Cost Fair Value Price Credit FX Total Share Middle-Market Lending North America $1,124,574 $1,126,100 $1,114,910
Slide 16: Barings BDC Income Statement
Barings BDC Income Statement NII for the three months ended June 30, 2023, was $0.31 per share driven by a 12% quarter-over-quarter increase in total investment income, offset by higher incentive fees due to unrealized appreciation and the incentive fee lookback calculation. 2Q23 1Q23 4Q22 3Q22 2Q22
Slide 17: Barings BDC Balance Sheet
Barings BDC Balance Sheet Debt-to-equity at June 30, 2023 was 1.24x, or 1.15x1 after adjusting for cash and foreign currencies, short-term investments and unsettled transactions June 30, March 31, December 31, September 30, June 30, 2023 2023 2022 2022 2022 Assets: Investments at fair value: Non-Con
Slide 18: Asset and Liability Mix
Asset and Liability Mix Barings BDC seeks to match its assets with a diversified mix of secured and unsecured debt FUNDING MIX BY SENIORITY (000’S) FUNDING MIX BY ASSET CLASS (000’S) $3,000,000 $2,750,000 Cash, ST Cash, ST Investments & Other Investments & $2,500,000 Assets Other Assets $223,274 ING
Slide 19: Debt Summary and Maturity Profile
Debt Summary and Maturity Profile BBDC’s debt is split approximately 50/50 between unsecured and secured debt As of 6/30/2023 As of 3/31/2023 As of 12/31/2022 As of 9/30/2022 Principal Principal Principal Principal Principal Principal Principal Principal Interest Amount Amount Amount Amount Amount A
Slide 20: Liquidity Summary
Liquidity Summary Barings BDC has adequate available liquidity to support its unused capital commitments Debt / Net Debt-to-Equity Ratio Scenarios Debt / Net Debt Debt / Net Debt-to- Outstanding Total Net Assets Equity Ratio(1) Debt-to-equity ratio, June 30, 2023 $1,497.1 $1,207.6 1.24x Adjust for c
Slide 21: Quarterly Dividends
Quarterly Dividends Barings BDC declared a 3Q23 dividend of $0.26 per share, an increase of $0.01 vs 1Q23. BBDC DIVIDENDS DECLARED PER SHARE $0.28 $0.26 $0.26 $0.25 $0.25 $0.24 $0.24 $0.24 $0.24 $0.23 $0.22 $0.22 $0.21 $0.20 $0.20 $0.19 $0.18 $0.17 $0.16 $0.16 $0.16 $0.16 $0.15 $0.14 $0.14 $0.13 $0.
Slide 22: Appendix
Appendix Barings‐Public
Slide 23: Appendix: Reconciliation of Debt-to-Net Debt & Calculation of Net Debt-to-Equity Ratio
Appendix: Reconciliation of Debt-to-Net Debt & Calculation of Net Debt-to- Equity Ratio June 30, March 31, December 31, September 30, June 30, 2023 2023 2022 2022 2022 Total debt (principal) $1,497,087 $1,494,485 $1,454,144 $1,375,989 $1,539,380 minus: Cash and foreign currencies (80,330) (55,395) (
Slide 24: Appendix: Barings BDC Corporate Data
Appendix: Barings BDC Corporate Data BOARD OF DIRECTORS CORPORATE OFFICERS RESEARCH COVERAGE Corporate Headquarters 300 South Tryon Street Eric Lloyd Eric Lloyd Bank of America Suite 2500 Executive Chairman & CEO of BBDC, Chief Executive Officer Merrill Lynch Charlotte, NC 28202 President of Barings