Barings Bdc, Inc. · NYSE:BBDC
Barings Bdc — Q3 2023 Earnings Presentation
24 slides from Barings Bdc's earnings presentation, Nov 10, 2023
Slide 1: Barings BDC, Inc. Third Quarter 2023 Earnings Presentation
NOVEMBER 10, 2023 Barings BDC, Inc. Third Quarter 2023 Earnings Presentation
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
A D M A S T E R - S T A M P ! 2 3 - 3 1 1 7 4 8 Agenda 5 ERIC LLOYD 3Q 2023 HIGHLIGHTS (LLOYD) Summary points of the quarter. IAN FOWLER BARINGS BDC MARKET UPDATE & INVESTMENT PORTFOLIO (FOWLER) ELIZABETH MURRAY Update on the portfolio performance. BRYAN HIGH MATTHEW FREUND BARINGS BDC FINANCIALS (M
Slide 4: Who We Are
BARINGS OVERVIEW Barings, a subsidiary of MassMutual, is a global investment manager sourcing differentiated opportunities and building portfolios across public Who We Are and private fixed income, real estate and specialist equity markets. External AUM by Region1 EMEA 28% Americas 42% Asia Pacific
Slide 5: Barings BDC Franchise
Sponsor Backed Investments Barings BDC Franchise What is it? Financing the operating Typical Terms companies of issuers Owned by • <50% Loan to Value Private credit expertise delivering Private Equity firms • Maintenance Covenants comprehensive exposure to the • EBITDA between $15 and $75 Assets are
Slide 6: Third Quarter 2023 Highlights
Third Quarter 2023 Highlights Net asset value (NAV) Total originations during the as of September 30, quarter were $138 million, NET ASSET 2023, was $11.25 per ORIGINATIONS while sales and repayments VALUE share as compared to totaled $104 million, for net $11.34 as of June 30, deployments of $34 mi
Slide 7: Selected Financial Highlights
Selected Financial Highlights Balance Sheet Highlights 3Q 2023 2Q 2023 1Q 2023 4Q 2022 3Q 2022 Investment Portfolio, at Fair Value $2,521.6 $2,505.9 $2,556.1 $2,448.9 $2,332.5 Total Debt Outstanding (Principal) $1,521.1 $1,497.1 $1,494.1 $1,454.1 $1,376.0 Total Net Assets (Equity) $1,198.2 $1,207.6
Slide 8: Portfolio Highlights
Portfolio Highlights Senior Secured Focus 4% 5% $2.52B 335 14% First Lien Second Lien PORTFOLIO SIZE ISSUER COUNT Mezzanine 4% Equity 7% Structured JV 67% 74% 89% SECURED DEBT FLOATING RATE Diversified Industry Exposure 627 BPS 11.2% Finance & Insurance WEIGHTED YIELD AT 15% Services: Business AVERA
Slide 9: Portfolio Composition
Portfolio Composition Investment Portfolio by Issuer Investment Portfolio Strategy1 • Barings BDC maintains a highly diversified portfolio, with the top • BBDC’s existing investments are substantially consistent with our issuer accounting for 6.2% of exposure and the top 10 issuers long-term strateg
Slide 10: Portfolio Composition Trends
Portfolio Composition Trends Consistent Focus on Secured Investments Active Rotation to Barings Originated Loans 3% 3% 3% 3% 4% 6% 5% 5% 5% 5% 13% 12% 10% 10% 10% 10% 18% 2% 3% 3% 3% 12% 12% 13% 14% 14% 4% 4% 4% 4% 6% 4% 4% 8% 7% 6% 6% 7% 87% 84% 86% 87% 87% 88% 76% 67% 69% 69% 68% 67% MVC Sierra Ac
Slide 11: Risk Rating Trends
1 Issuer performing materially above expectations Risk Rating Trends 2 Issuer performing consistent with expectations Portfolio performance is reflected in the shifts between the risk rating categories shown at right 3 Issuer performing modestly below expectations Non-Accruals comprise approximately
Slide 12: Credit Support Agreements
Credit Support Agreements What are the Credit Support Agreements (CSAs)? How will Barings LLC compensate Barings BDC investors for the losses? The CSAs are a form of manager support between Barings LLC and BBDC created in connection with the acquisitions of MVC and Sierra. First, Barings LLC will wa
Slide 13: Credit Support Agreements
Credit Support Agreements Based on current portfolio valuations, the Sierra CSA and the MVC CSA provide substantial protection to shareholders with respect to the acquired assets Sierra Income CSA MVC Capital CSA REMAINING ISSUERS — 41 REMAINING POSITIONS—4 $100.0 $100.0 $100.0 $80.0 $80.0 $60.0 $60
Slide 14: BBDC Focuses on Shareholders
BBDC Focuses on Shareholders BBDC takes a thoughtful approach to align interests with shareholders INCENTIVE FEE HURDLE RATE CREDIT SUPPORT AGREEMENTS Hurdle Rate 8.50% 8.00% $123 • BBDC Hurdle Rate: 8.25% 7.50% • Barings made a commitment to million • Average Externally- 7.00% protect investors sup
Slide 15: BBDC Net Asset Value Per Share (NAV) Bridge
BBDC Net Asset Value Per Share (NAV) Bridge BBDC’s NAV has decreased in 3Q23 to $11.25 (September 30, 2023) from $11.34 (June 30, 2023), a decrease of 0.8%, driven primarily by realized losses and unrealized depreciation on the current portfolio offset by net investment income exceeding the dividend
Slide 16: BBDC Income Statement
BBDC Income Statement 3Q23 2Q23 1Q23 4Q22 3Q22 Invest ment income: Interest incom e $55,405 $55,4 2 4 $51 ,890 $4 7 ,9 96 $4 0,6 3 9 Div idend incom e 8,51 5 1 0,2 50 7 ,87 4 7 ,3 60 7 ,905 Fee and other incom e 2 ,650 4 ,3 01 3 ,3 00 4,3 3 4 4 ,3 2 1 Pay m ent-in-kind interest incom e 3 ,9 7 9 5,1
Slide 17: BBDC Balance Sheet
BBDC Balance Sheet Debt-to-equity at September 30, 2023 was 1.27x, or 1.18x after adjusting for cash and foreign currencies and unsettled transactions Sept ember 30, June 30, March 31, December 31, Sept ember 30, 2023 2023 2023 2022 2022 Asset s: Inv estm ents at fair v alue: Non-Control / Non-Affil
Slide 18: Debt Summary & Maturity Profile
Debt Summary & Maturity Profile BBDC’s debt remains split approximately 50/50 between unsecured and secured debt As of 9/30/2023 As of 6/30/2023 As of 3/31/2023 As of 12/31/2022 Principal Principal Principal Principal Principal Principal Principal Principal Interest Amount Amount Amount Amount Amoun
Slide 19: Quarterly Dividends
BBDC Dividends Declared Per Share $0.28 $0.26$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 Quarterly $0.18 $0.17 Dividends $0.16 $0.15 $0.16 $0.16 $0.16 $0.14 Barings BDC $0.14 $0.13 $0.12 declared a 4Q23 $0.12 dividend of $0.26 per $0.10 $0.10 share, unchan
Slide 20: Appendix
Appendix BARINGS
Slide 21: Reconciliation of Debt-to-Net Debt & Calculation of Net Debt-to-Equity Ratio
Reconciliation of Debt-to-Net Debt & Calculation of Net Debt-to-Equity Ratio Sept ember 30, June 30, March 31, December 31, September 30, 2023 2023 2023 2022 2022 Total debt (principal) $1 ,52 1 ,1 2 6 $1 ,4 9 7 ,087 $1 ,4 94 ,1 1 2 $1 ,4 54 ,1 4 4 $1 ,3 7 5,989 minus: Cash and foreign currencies (4
Slide 22: Barings BDC Corporate Data
Barings BDC Corporate Data BOARD OF DIRECTORS MANAGEMENT TEAM 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 Derek Hewett
Slide 23: Important Information
Important Information Any forecasts in this document are based upon Barings opinion of the market at the date of preparation and are subject to change without notice, dependent upon many factors. Any prediction, projection or forecast is not necessarily indicative of the future or likely performance
Slide 24: Barings: Investing Together
BARINGS Investing Together PUBLIC & PRIVATE FIXED INCOME | REAL ESTATE | SPECIALIST EQUITIES