Barings BDC Inc (BBDC) 2024 Q1 法說會逐字稿

And I would like to welcome everyone to the Barings BDC Inc. Conference Call for the Quarter Ended and year ended March 31, 2024. (Operator Instructions) Today's call is being recorded and a replay will be available approximately two hours after the conclusion of the call on the company's website at w. w. w. dot Barings BDC.com under the Investor Relations section.

我謹歡迎大家參加 Barings BDC Inc. 於 2024 年 3 月 31 日結束的季度和年度的電話會議。（操作員說明）今天的通話正在錄音，通話結束後大約兩小時將在公司網站 w 上提供重播。 w。 w。在投資者關係部分下點 Barings BDC.com。

Time, I will turn the call over to Joe Mazzoli, Head of Investor Relations for Barings BDC.

到時候，我會將電話轉給 Barings BDC 投資者關係主管 Joe Mazzoli。

Good morning, and thank you for joining today's call. Please note that this call may contain forward-looking statements that include statements regarding the company's goals, beliefs, strategies, future operating results and cash flows. Although the Company believes these statements are reasonable, actual results could differ materially from those projected in forward-looking statements.

早安，感謝您參加今天的電話會議。請注意，本次電話會議可能包含前瞻性陳述，其中包括有關公司目標、信念、策略、未來營運績效和現金流量的陳述。儘管公司認為這些陳述是合理的，但實際結果可能與前瞻性陳述中的預測有重大差異。

These statements are based on various underlying assumptions and are subject to numerous uncertainties and risks, including those disclosed under the sections titled Risk Factors and Forward-Looking Statements in the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission. Barings BDC undertakes no obligation to update or revise any forward looking statements unless required by law.

這些陳述基於各種基本假設，並受到許多不確定性和風險的影響，包括公司截至2024 年3 月31 日的季度10-Q 表格季度報告中標題為“風險因素和前瞻性陳述”的部分中揭露的不確定性和風險，向美國證券交易委員會備案。除非法律要求，霸菱 BDC 不承擔更新或修改任何前瞻性聲明的義務。

And I'll now turn the call over to Eric Lloyd, Chief Executive Officer of Barings BDC.

我現在將把電話轉給巴林銀行 BDC 執行長 Eric Lloyd。

And thanks, Joe, and good morning, everyone. We appreciate you joining us for today's call. Please note that throughout today's call, we'll be referring to our first quarter 2024 earnings presentation that's posted on the Investor Relations section of our website on the call today, I'm joined by Barings BDC's President, Matt Freund; Chief Financial Officer, Elizabeth Murray; and bearings, Head of Global Private Finance & DBDC. Bryan High.

謝謝喬，大家早安。我們感謝您參加今天的電話會議。請注意，在今天的電話會議中，我們將參考我們網站投資者關係部分發布的 2024 年第一季度收益演示，Barings BDC 總裁 Matt Freund 也參加了今天的電話會議；財務長伊麗莎白·穆雷；和軸承，全球私人金融和 DBDC 主管。布萊恩高。

We are happy to be in a position to share a variety of positive performance metrics at BBDC. for the March quarter, but I'll also spend a moment speaking of some of the developments at our manager Barings LLC that have occurred during the quarter. First, let me begin with BDCs performance. DBDC. exhibited stability and strong operating results during the quarter ended March 31, our focus on the top of the capital structure investments and sponsor-backed issuers continues to serve investors well, our portfolio is predominantly sponsor-backed and is complemented by a selection of non-sponsored and platform investments.

我們很高興能夠在 BBDC 分享各種正面的績效指標。 3 月的季度，但我也會花一點時間談談我們的管理人 Barings LLC 在本季發生的一些進展。首先，讓我從 BDC 的效能開始。DBDC。截至3 月31 日的季度表現出穩定性和強勁的營運業績，我們對資本結構投資和保薦人支持的發行人的關注繼續為投資者提供良好服務，我們的投資組合主要由保薦人支持，並輔以精選的非贊助和平台投資。

Our portfolio strategy is outlined in greater detail on slide 5. This strategy serves as our guiding light as we continued to successfully invest throughout the market and deliver compelling returns to our shareholders. Net asset value per share was $11.44 compared to the prior quarter of $11.20, reflecting a year-over-year increase of 1.4%. And this is the highest point the portfolio has exhibited in the past two years.

我們的投資組合策略在投影片 5 中有更詳細的概述。這項策略成為我們持續成功投資整個市場並為股東帶來豐厚回報的指路明燈。每股淨值為 11.44 美元，上一季為 11.20 美元，年增 1.4%。這是該投資組合近兩年來表現出的最高點。

Net investment income for the quarter was $0.28 and out earned our quarterly dividend by 7.6%. Perhaps most importantly, and a metric that we are particularly proud of our nonaccruals during the quarter declined to 0.3% of the fair market value of the portfolio, a level a level we consider to be best in class and especially in light of the inconsistent economic backdrop, our performance is the result of our focus on the top of the capital structure and within more defensive industries.

本季的淨投資收益為 0.28 美元，為我們帶來了 7.6% 的季度股息。也許最重要的是，我們對本季的非應計費用下降至投資組合公平市場價值的 0.3% 感到特別自豪，這是我們認為同類最佳的水平，特別是考慮到經濟狀況不一致在此背景下，我們的業績是我們專注於資本結構頂層和防禦性更強的行業的結果。

We believe GBDC remains well positioned for any further volatility and uncertainty in the market going forward. As our shareholders know, we are actively working to maximize the value in the legacy holdings acquired from MVC Capital and Sierra Income and rotate them into compelling Barings originated positions. Non Barings originated assets now only amount to 11% of the portfolio at fair value, down from 24% at the beginning of 2022.

我們相信，GBDC 仍能應對未來市場的任何進一步波動和不確定性。正如我們的股東所知，我們正在積極努力最大化從 MVC Capital 和 Sierra Income 收購的遺留持股的價值，並將其輪換到引人注目的霸菱起源職位。以公允價值計算，非霸菱衍生資產目前僅佔投資組合的 11%，低於 2022 年初的 24%。

And potential losses from these assets are protected by credit support agreements, limiting downside risks for BBDC. investors, Arndt, but our investment portfolio continued to perform well in the first quarter, there's no substitute for fundamental credit analysis, which has been core to Barings underwriting thousands to early 1990s as reflected in the health of the DBDC. portfolio today, including the acquired year and MVC assets, our total nonaccruals are industry leading 0.3% on a fair value basis and 1.5% of the portfolio on a cost basis, this is down from 1.5% on a fair fair value basis and 2.5% on a cost basis as of December 31st, 2023.

這些資產的潛在損失受到信貸支援協議的保護，限制了 BBDC 的下行風險。投資者，阿恩特，但我們的投資組合在第一季繼續表現良好，基本信用分析是無可替代的，從1990 年代初以來，基本信用分析一直是巴林銀行承保數千筆資金的核心， DBDC 的健康狀況也反映了這一點。今天的投資組合，包括收購年份和MVC 資產，我們的非應計費用總額處於行業領先水平，以公允價值計算為0.3%，按成本計算佔投資組合的1.5%，低於以公允價值計算的1.5% 和2.5%截至 2023 年 12 月 31 日，以成本計算。

Turning to the earnings power of the portfolio, the increase in base rates has largely been reflected within the portfolio with weighted average yields on a fair value basis stabilizing at 11.3%, substantially comparable to the prior quarter's figures. We remain conservative on our base dividend policy and our Board declared a fourth quarter dividend of $0.26 per share, consistent with the prior quarter. On an annualized basis, the dividend level equates to a 9.1% yield on our net asset value of $11.44. We believe the best measure of the portfolio's performance, nonaccruals, net asset value and NI were extremely compelling from the March quarter and anticipate continued strength in the quarters ahead.

至於投資組合的獲利能力，基本利率的上升很大程度上反映在投資組合內，以公允價值為基礎的加權平均收益率穩定在11.3%，與上一季的數字基本相當。我們對基本股利政策保持保守，董事會宣布第四季股利為每股 0.26 美元，與上一季一致。以年化計算，股息水準相當於我們 11.44 美元的資產淨值的 9.1% 收益率。我們認為，衡量投資組合業績、非應計費用、資產淨值和淨資產的最佳衡量標準從三月份的季度來看非常引人注目，並預計未來幾季將繼續強勁。

I would now like to take a moment to acknowledge the recent developments at Barings before I do so I want to begin by highlighting several key points. First, Barings is a global asset management firm with more than $400 billion of assets under management as of March 31st, 2024. Second, bearings directly employs more than 800 professionals dedicated to investing in our core strategies and driving long-term value for our clients and sponsors.

我現在想花點時間了解巴林銀行最近的發展，在此之前我想先強調幾個關鍵點。首先，霸菱是一家全球資產管理公司，截至2024年3月31日，其管理的資產超過4,000億美元。其次，Bearing 直接僱用了 800 多名專業人士，致力於投資我們的核心策略並為我們的客戶和贊助商帶來長期價值。

Third, we were a wholly-owned subsidiary of MassMutual and have been investing in private credit on its behalf for more than three decades. We also want to emphasize that when it comes to private credit, specifically CBDC. is just one part of the Barings global platform, which also includes its other BDCs and the entire private assets business and which bearings remains fully committed to and is actively investing in.

第三，我們是萬通互助銀行的全資子公司，三十多年來一直代表其投資私人信貸。我們也想強調，當涉及私人信貸，特別是 CBDC 時。只是霸菱全球平台的一部分，該平台還包括其其他 BDC 和整個私人資產業務，軸承仍全力致力於並積極投資。

As you may be aware on March eighth, 2020 for Barings receive resignations of a number of members of the investment team within the Global Private Finance organization. Six of these individuals were focused on the North American strategy out of a total North American investment team of 56. We have successfully executed a retention strategy across the entirety of the remaining global investment team. BBDC. investors know that the principal investment strategies for the BDC portfolio include sponsored investments, nonsponsored investments and platform investments.

正如您可能知道的那樣，巴林銀行於 2020 年 3 月 8 日收到了全球私人金融組織內投資團隊的一些成員的辭職。北美投資團隊共 56 人，其中 6 人專注於北美策略。我們已經成功地在整個剩餘的全球投資團隊中執行了保留策略。BBDC。投資人知道，BDC投資組合的主要投資策略包括贊助投資、非贊助投資和平台投資。

Furthermore, BDC status as a business development company regulated under the 1940 Act has always necessitated that the portfolio tilt primarily towards North American assets as a result of the overwhelming stability of the Global Private Finance North American investment team and under uninterrupted focus on North American investment opportunities.

此外，BDC 作為一家受 1940 年法案監管的業務開發公司，由於全球私人金融北美投資團隊的壓倒性穩定性以及對北美投資的不間斷關注，其投資組合始終需要主要向北美資產傾斜。

And in combination with the fact that the BDC resource assets from a variety of other investment teams within Barings BDC management believes we are well positioned to deliver compelling risk-adjusted returns for shareholders in the quarters ahead. Stability offered by the current team is important, but we also plan to augment this team by making strategic hires in the quarters to come. Our hiring efforts will target experienced origination professionals who maintain existing sponsor relationships and possess a strong fundamental credit approach.

結合霸菱 BDC 管理層內其他各種投資團隊的 BDC 資源資產這一事實，我們相信我們有能力在未來幾季為股東提供令人信服的風險調整回報。目前團隊提供的穩定性很重要，但我們也計劃在未來幾季透過策略性招募來增強團隊。我們的招募工作將針對經驗豐富的發起專業人士，他們維持現有的贊助商關係並擁有強大的基本信用方法。

We look forward. We look forward to sharing more as we recruit and onboard these hires in the quarters to come like us. Massmutual takes a long-term view when it comes to the asset class of the business MassMutual intends to continue to actively invest with Barings in the middle market direct lending sector, reflecting their ongoing confidence in both the value and performance of the asset class and our capabilities. With that said, we know that many of you have reached out with questions regarding the personnel changes.

我們期望。我們期待在未來幾季招募和入職這些與我們一樣的員工時分享更多資訊。萬通互惠理財對業務的資產類別抱有長遠的看法萬通互惠理財打算繼續與霸菱銀行在中間市場直接貸款領域積極投資，這反映了他們對該資產類別的價值和表現以及我們的持續信心。話雖如此，我們知道你們中的許多人都對人事變動提出了疑問。

As we look ahead, we see incredible opportunity to leverage the strength of our scaled private credit franchise and leveraging the resources that support more than $300 billion of credit investments. Our investment process and philosophy remains unchanged and our deep bench of talent continues to leverage our originate our route, our origination network and deploy capital consistent with our stated strategy. Most importantly, our commitment to our investors is unwavering and as strong as it's ever been.

展望未來，我們看到了利用我們規模化私人信貸特許經營的優勢以及支持超過 3000 億美元信貸投資的資源的絕佳機會。我們的投資流程和理念保持不變，我們深厚的人才儲備繼續利用我們的原創路線、我們的原創網絡，並根據我們既定的策略部署資本。最重要的是，我們對投資者的承諾堅定不移，一如既往。

I'll now turn the call over to Matt.

我現在將電話轉給馬特。

Thanks, Eric. To begin discussing market activity, I would first like to give an update on inbound deal volumes post the original resignations that were received on March eighth. I'm happy to share that over the past two months, we have seen received inbound deal volume in line with the levels experienced historically moving to specifics during the quarter, the BDC's portfolio increased $23 million on a net basis during the quarter with gross fundings of $142 million, offset by $119 million of repayments. \

謝謝，埃里克。為了開始討論市場活動，我首先想提供 3 月 8 日收到的原始辭職報告後入境交易量的最新情況。我很高興與大家分享，在過去兩個月中，我們看到收到的入境交易量與本季度歷史上的具體水平一致，BDC 的投資組合在本季度的總資金淨額增加了 2300 萬美元1.42 億美元，被還款1.19 億美元抵銷。\

Activity broadly remained tempered during the quarter, but directionally comparable to the immediately preceding quarters, much unchanged from last quarter and based on recent conversations, investment bankers have reiterated their expectation that LBO activity is expected to meaningfully increase in the quarters to come. Our sponsor issuer clients have expressed the same anticipated uptick in transact However, while we have seen an uptick in the number of early-stage opportunities, the conversion rates to close transactions are trending towards historic lows.

本季度的活動總體保持溫和，但方向與前幾季度相當，與上季度基本持平，根據最近的對話，投資銀行家重申了他們的預期，槓桿收購活動預計將在未來幾個季度大幅增加。我們的保薦發行人客戶也表達了同樣的預期交易量上升。

Sponsors do continue to execute add-ons for companies already within their portfolios, which make logical sense. And add-on multiples are below the original platform purchase prices in effect, enabling sponsors to reduce their cost bases and hedge against any compression in exit multiples, investors and Barings BDC benefit by having a seasoned portfolio that provides opportunity to deploy capital into issuers. We already know well, while new LBOs are below historical averages refinancing activity has increased, which started in a liquid market in early 2024.

贊助商確實會繼續為其投資組合中已有的公司執行附加項目，這是合乎邏輯的。附加倍數實際上低於原始平台購買價格，使發起人能夠降低成本基礎並對沖退出倍數的任何壓縮，投資者和霸菱BDC 受益於擁有經驗豐富的投資組合，提供了將資本部署到發行人的機會。我們已經很清楚，雖然新增槓桿收購低於歷史平均水平，但再融資活動卻有所增加，這項活動於 2024 年初在流動性市場中開始。

The recent wave of refinancings is not solely isolated to the broadly syndicated markets. We have started to witness the competitive dynamics in the direct lending ecosystem as well, though it appears most acute for issuers and EBITDA of $75 million and above at the moment, Barry's commitment to the core of the middle market is anticipated to serve investors well as the terms of large issuers gravitate towards the terms offered by broadly syndicated markets. And we're able to preserve some pricing protection in the core of what we focus.

最近的再融資浪潮不僅限於廣泛的銀團市場。我們也開始見證直接貸款生態系統中的競爭動態，儘管目前對於發行人和 7500 萬美元及以上的 EBITDA 來說似乎最為激烈，但巴里對中間市場核心的承諾預計將為投資者提供良好的服務大型發行人的條款傾向於廣泛的銀團市場提供的條款。我們能夠在我們關注的核心業務中保留一些定價保護。

Turning to our current portfolio, 72%, which can Turning to the current portfolio, 72% of our investments consist of secured investments with approximately 66% being first-lien securities. Ebdt experienced a stabilization of interest coverage during the quarter and finished the quarter with a weighted average interest coverage of 2.2 times in line with the fourth quarter. It's fair to say that the full impact of an increase in the interest rates has not been reflected within the cash flow metrics of the portfolio.

轉向我們目前的投資組合，72%，這可以轉向當前的投資組合，我們的投資的 72% 由擔保投資組成，其中約 66% 是第一留置權證券。Ebdt 在本季的利息保障倍數趨於穩定，本季末的加權平均利息保障倍數為 2.2 倍，與第四季持平。可以公平地說，利率上升的全部影響尚未反映在投資組合的現金流量指標中。

The stabilization of the interest rate coverage at the high end of our previous guidance ranging between two and two and a quarter times sort of another data point of the strong credit quality within the our avoidance of various industries prone to economic volatility, oil and gas restaurants, retail metals, among them has proven to be a sound strategy against a backdrop of less economic predictability, combined with what we believe are reasonable going in leverage multiples, the median gross margin in the North American global private finance portfolio a portfolio similar to EBDT stood at 50%, up from 48% one year earlier and gives us confidence that our issuers are successfully pushing through price increases to combat inflationary pressures in their businesses.

利率覆蓋率穩定在我們先前指導的上限的兩倍到兩倍又四分之一倍之間，這是我們避免易受經濟波動的各個行業、石油和天然氣餐廳等信貸品質良好的另一個數據點在經濟可預測性較差的背景下，零售金屬等已被證明是一項明智的策略，再加上我們認為槓桿倍數合理，北美全球私人融資投資組合的毛利率中位數與EBDT 類似。一年前的48% 上升到50%，這讓我們相信我們的發行人正在成功推動價格上漲，以應對其業務的通膨壓力。

Adjusted EBITDA margins for the same sample set were 21% and unchanged from the prior year's period. Portfolio composition remained highly diversified with the top 10 issuers accounting for 22.6% of the fair market value. Recall that the top two positions within the portfolio, Eclipse business capital and repaid holdings, our platform investments originating middle-market loans. These positions have a number of underlying issuers. Assets included in the other classification within our materials include structured positions and certain acquired positions that will not be originated on a new issue basis going forward.

同一樣本組的調整後 EBITDA 利潤率為 21%，與去年同期持平。投資組合構成維持高度多元化，前 10 名發行人佔公平市值的 22.6%。回想一下投資組合中的前兩個位置，Eclipse 商業資本和償還控股，我們的平台投資源自於中間市場貸款。這些頭寸有多個基礎發行人。我們材料中其他分類中包含的資產包括結構性頭寸和某些收購頭寸，這些頭寸未來不會在新發行的基礎上產生。

As Eric highlighted, we anticipate rotating out of these positions as market conditions allow in the quarters to come. Risk ratings exhibited minimal movement during the quarter as our issuers exhibited by our issuers exhibiting the most stress classified risk ratings four and five were 8% on a combined basis quarter over quarter, while nonaccruals accounted for only $8 million of fair market value within the portfolio and 30 basis points of assets.

正如埃里克（Eric）所強調的那樣，我們預計在未來幾個季度，隨著市場條件的允許，我們將輪換這些職位。本季風險評級變動最小，因為我們的發行人表現出壓力最大的風險評級四級和五級，季度環比合計為 8%，而非應計項目僅佔投資組合內公平市場價值 800 萬美元和30個基點的資產。

Encouragingly, we also experienced some positive movement at certain issuers performing consistent with expectations as underwriting have outperformed in the recent quarter. We remain confident in the credit quality of the underlying portfolio, the uncorrelated nature and associated value of investments in Eclipse and repaid continued to provide exposure to additional middle market lending markets within industries not suited well to conventional cash flow loans.

令人鼓舞的是，由於最近一個季度的承銷表現優於預期，某些發行人的表現也符合預期，我們也經歷了一些正面的變化。我們對基礎投資組合的信貸品質仍然充滿信心，Eclipse 投資的不相關性和相關價值以及償還繼續為不太適合傳統現金流貸款的行業提供額外的中間市場貸款市場的曝險。

BBD is committing committed to delivering an attractive risk-adjusted return to shareholders over the long term, we are investors in middle market companies. Our goal, our global reach and significant scale across asset classes is BBDC., a unique ability to select risk and return compared to other managers, but at our core middle-market credit is what we do.

BBD 致力於長期為股東提供有吸引力的風險調整回報，我們是中間市場公司的投資者。我們的目標、我們的全球影響力和跨資產類別的顯著規模是 BBDC。

I'll now turn the call over to Elizabeth.

我現在將電話轉給伊莉莎白。

Thanks, Matt. On Slide 15, you can see the full bridge of NAB per share movement in the first quarter. Nap per share was $11.44 as of March 31st, which is an increase of 1.4% over the prior quarter and an increase of 2.4% year over year. Our net investment income exceeded the $0.26 per share dividend by 7.6%. Net unrealized depreciation from investments, CSA and FX lifted now per share by $0.34, which was offset by net realized losses on the portfolio and FX by $0.2 per share.

謝謝，馬特。在投影片 15 上，您可以看到第一季 NAB 每股變動的全橋。截至3月31日，每股NAP為11.44美元，季增1.4%，年增2.4%。我們的淨投資收益比每股 0.26 美元的股息高出 7.6%。投資、CSA 和外匯的未實現淨折舊每股增加 0.34 美元，但被投資組合和外匯的已實現淨虧損每股 0.2 美元所抵消。

Net realized loss on the portfolio was predominantly due to the restructuring of our investments in core scientific and resolute investment managers, which was primarily reclassified from and unrealized depreciation evaluation of the credit support agreements decreased by approximately $6.3 million, which is driven by unrealized appreciation in the underlying portfolios and an increase in the applicable discount rate during the quarter. The fair value of the CRSCSA. decrease from $40.5 million in the fourth quarter to $35.4 million as of March 31st.

投資組合的已實現淨虧損主要是由於我們對核心科學和堅決投資管理公司的投資進行了重組，這主要是由於信貸支持協議的未實現折舊評估減少了約630 萬美元，這是由於未實現的升值所致。CRSCSA 的公允價值。截至 3 月 31 日，從第四季的 4,050 萬美元減少至 3,540 萬美元。

During the first quarter of this year, portfolio had sales and repayments of approximately $15 million, and we have 36 positions remaining in the portfolio fair value of the NBCCS., a decrease from $17.3 million to $16.1 million, with four positions remaining in the portfolio and anticipate the sale of MBC auto in the second half of this year.

今年第一季度，投資組合的銷售和還款約為1,500 萬美元，NBCCS 的投資組合公允價值中還剩下36 個頭寸，從1,730 萬美元減少到1,610 萬美元，投資組合中還剩下4 個頭寸並預計今年下半年MBC汽車的銷售。

Our net investment income was $0.28 per share for the quarter compared to $0.31 per share in the prior quarter and $0.25 per share for the first quarter of 2023. Investment income in the quarter was primarily driven by the continued benefit of higher base rates, partially offset by lower dividends from our investments in Eclipse capital and Sierra JV increase in NAB, driven by portfolio appreciation was accompanied by an increase in incentive fees earned by the manager through the incentive fee look-back calculation.

本季我們的淨投資收益為每股 0.28 美元，而上一季為每股 0.31 美元，2023 年第一季為每股 0.25 美元。本季的投資收入主要是由基本利率較高的持續收益推動的，部分被我們對Eclipse 資本和Sierra JV 投資的股息減少所抵消，NAB 的投資增加是由投資組合升值推動的，同時伴隨著我們賺取的激勵費用的增加。

Our net leverage ratio, which is defined as regulatory leverage, net of unrestricted cash and net unsettled transactions, was 1.17 times at quarter end, up modestly from 1.15 times at the quarter ended December 31st, and currently sits within our long-term target of 0.9 times to 1.25 times. Our funding mix remains highly defensible, both in terms of seniority and asset class, including a significant level of support provided by the unsecured debt in our capital structure. At March 31st, our unsecured debt accounted for $1 billion of our fundings and equated to 70% of our outstanding.

我們的淨槓桿率（定義為監管槓桿，扣除不受限制的現金和淨未結算交易）在季度末為 1.17 倍，較截至 12 月 31 日的季度的 1.15 倍小幅上升，目前處於我們的長期目標0.9倍至1.25倍。無論是在優先順序或資產類別方面，我們的融資組合仍然具有高度的防禦性，包括我們資本結構中的無擔保債務所提供的大量支持。截至 3 月 31 日，我們的無擔保債務占我們資金的 10 億美元，相當於我們未償債務的 70%。

As you may recall, during the first quarter of 2024 for Barings BDC issued nearly $300 million senior unsecured notes to enhance the flexibility of our capital structure. Note issuance was significantly oversubscribed. It has positioned BBDC. with significant operating flexibility in the quarters to come. We continue to maintain significant flexibility in our capital structure with the next bond maturity in the second half of 2025 and maintain a ladder of maturities out to 2029.

您可能還記得，巴林銀行BDC在2024年第一季發行了近3億美元的優先無抵押票據，以增強我們資本結構的靈活性。票據發行出現大幅超額認購。它已經定位了BBDC。在未來幾季具有顯著的營運彈性。我們繼續保持資本結構的高度彈性，下一次債券到期日為 2025 年下半年，並維持直至 2029 年的階梯式到期日。

Barings BDC currently has $215 million of unfunded commitments to our portfolio companies as well as $65 million of outstanding commitments to our joint venture investments. We have available cushion against our leverage limit to meet the entirety of these commitments. As mentioned earlier, the Board declared a second quarter dividend of $0.26 per share, a 9.1% distribution on net asset value and is consistent with our first quarter of 2024 dividend during our earnings call in February, we disclosed the Board authorized a 30 million share repurchase plan for 2024.

Barings BDC 目前對我們的投資組合公司有 2.15 億美元的無資金承諾，以及對我們的合資企業投資的 6500 萬美元的未兌現承諾。我們有可用的緩衝來應對我們的槓桿限制，以履行全部這些承諾。如前所述，董事會宣布第二季度股息為每股 0.26 美元，佔資產淨值的 9.1%，與 2 月份財報電話會議上的 2024 年第一季股息一致，我們披露董事會授權發行 3000 萬股2024年回購計劃。

We continue to be active users of our share repurchase first quarter was no exception as we repurchased more than 115,000 shares during the quarter and exhibited continued momentum of repurchase activity after purchasing 1.8 million shares in 2023. Our focus on share repurchases is one example of BBDC.'s thoughtful approach to aligning our interest to shareholders.

我們仍然是股票回購的活躍用戶，第一季也不例外，我們在本季回購了超過 115,000 股股票，並在 2023 年購買了 180 萬股後表現出持續的回購活動勢頭。我們對股票回購的關注是 BBDC. 使我們的利益與股東利益保持一致的深思熟慮的例子之一。

I'll wrap up our prepared remarks with an update on our investment pipeline. Thus far in the second quarter, we have made $11 million of new commitments and funded $9 million. With that, operator, we will open the line for questions.

我將透過我們投資管道的最新情況來結束我們準備好的發言。到目前為止，第二季我們已做出 1,100 萬美元的新承諾並提供了 900 萬美元的資金。接線員，我們將開通提問線路。

(Operator Instructions) Finian O'Shea with Wells Fargo.

（操作員說明）Finian O'Shea 與富國銀行。

Hey, Ron, good morning. Bear air. So a couple of the opening remarks on strategic changes to you update us on the LP or the funds business. I think it was reported that you voluntarily halted investing there. Is that still the curious and ultimately how the conversations are going with existing and new LPs for the GPF., our direct lending business.

嘿，羅恩，早安。熊氣。因此，我們將向您介紹一些有關策略變化的開場白，以介紹有關有限合夥人或基金業務的最新情況。我認為有報道稱您自願停止在那裡投資。這仍然是令人好奇的嗎？

Thanks is up double-digits and so on. We did so with acquisitions came in that Friday leadership, executive leadership here at Barings made a decision to pause investing in certain accounts. We didn't have to pause the investing in those accounts, but we decided to do that because we always remind ourselves, right? It's not our money. It's other people's money that from an investing perspective.

感謝上升兩位數等等。我們在周五的領導層進行了收購，巴林銀行的執行領導層決定暫停對某些帳戶的投資。我們不必暫停對這些帳戶的投資，但我們決定這樣做是因為我們總是提醒自己，對嗎？這不是我們的錢。從投資的角度來看，這是別人的錢。

So we decided to make that pause and then have communications with investors, there's kind of two a couple of different bucket from those LPs perspective. There's things that are SMAs or funds of one that are more bespoke discussions that we have with that one counterparty. And then there's really, really the co-mingled funds. So funds that might have 10, 20, 30 investors in there that have things like O. packs and other things that we have to manage through that have different kind of time lines and times we cure things from a key person perspective.

因此，我們決定暫停一下，然後與投資者進行溝通，從這些有限合夥人的角度來看，有兩種不同的情況。有些事情是 SMA 或某一基金的事情，我們與該交易對手進行了更多客製化的討論。然後還有真正的混合基金。因此，基金可能有10、20、30 名投資者，其中有O. packs 之類的東西以及我們必須管理的其他東西，這些東西有不同的時間線和時間，我們從關鍵人物的角度來解決問題。

What I can represent to you is that a number of our funds have won or SMAs are have allowed us to continue to invest at this point in time and also can represent to you that our hold level in North America is generally consistent today with what it was prior to the events of March the date. And that whole level allows us to continue to lead deals in our core middle market franchise between [$15 million] and $75 million of EBITDA. Certain other vehicles are continuing to go through their normal process as far as cure periods with key persons and we're working with that LP base, a lot of along those lines. But again, a number of the funds have won the SMAs. We continue to invest in.

我可以向您表示的是，我們的一些基金已經獲勝，或者 SMA 使我們能夠在此時繼續投資，並且還可以向您表示，我們在北美的持有水平與今天的水平基本一致。三月事件之前。這一整體水準使我們能夠繼續在核心中間市場特許經營中領先 EBITDA 介於 [1500 萬美元] 至 7500 萬美元之間的交易。某些其他車輛正在繼續與關鍵人員一起經歷正常的流程，直到治癒期，我們正在與該 LP 基地合作，許多都是沿著這些思路進行的。但同樣，許多基金贏得了 SMA。我們繼續投資。

And I think that's helpful. And a small follow-up I forgot to throw in there. It looks like Joe, Kathy has slowed down or stopped investing. Is that the case for Joe? In the BDC?

我認為這很有幫助。我忘了添加一個小後續內容。看起來喬凱西已經放慢或停止了投資。喬的情況也是如此嗎？在商業發展中心？

Our relationship with Tasly partners, very constructive. And it's one that we believe will continue to be an important part of the BDC. But that's kind of a discussion we've had with them and we feel good about where that relationship is.

我們與天士力夥伴的關係非常有建設性。我們相信它將繼續成為 BDC 的重要組成部分。但這是我們與他們的討論，我們對這段關係的狀況感到滿意。

Okay, thanks. I'll do actually one more, if I may. Sorry. It started like in the the staffing or hiring part, the focus would be on adding originators. And just seeing if that implies that the repositioning and of the leadership and investment committee and so forth, the BDC you've announced that they announced thus far it is expected to be permanent, and that's that's all for me.

好的謝謝。如果可以的話，我實際上會再做一次。對不起。一開始就像在人員配備或招募部分一樣，重點是增加創辦人。只是看看這是否意味著領導層和投資委員會等的重新定位，您已經宣布的 BDC 到目前為止，預計將是永久性的，這就是我的全部內容。

Thanks.

謝謝。

Yes. So the investment committee that we have stated is a permanent investment committee. We have also stated that we expect to add to that investment committee over time North American investment committee. As for individuals, as it sits today, our prior committee was six number along those lines would be something we could look at over time as we add people.

是的。所以我們所說的投資委員會是常設投資委員會。我們也表示，我們希望隨著時間的推移，北美投資委員會將加入該投資委員會。至於個人，正如今天的情況，我們之前的委員會有六人，隨著時間的推移，隨著我們增加人員，我們可以考慮這一點。

I would say that the hires of origination is something I highlighted, but I wanted to take a step back and say the most important thing for us to on the hiring perspective is making sure we find a the right cultural fit and we don't rush into any type of hires we don't need to make hires to fill in some kind of gap or some kind of shortfall that we have here. Some we want to make a conscious deliberate hires that fit our culture and our credit philosophy, first of all, and then second of all, they bring originations, sponsor relationships that are additive to the existing platform that we have today as Elizabeth highlighted.

我想說的是，我強調了原創性的招聘，但我想退一步說，從招聘的角度來看，對我們來說最重要的是確保我們找到合適的文化契合點，並且我們不著急無論是哪種類型的招聘，我們都不需要透過招聘來填補我們這裡的某種空白或某種短缺。首先，我們希望有意識地、深思熟慮地聘用符合我們文化和信用理念的員工，其次，他們帶來了起源和贊助商關係，這些都是我們今天所擁有的現有平台的補充，正如伊麗莎白所強調的那樣。

I mean, we've seen a number of deals over the course of the last past two months from sponsors. Those relationships have been incredibly constructive. And I think you'll see some hires here in short order that we'll be able to announce. And I think that one of the things has been humbling and this process has been the amount of people who have reached out to us that interest interested joining the platform because of the strength of the platform.

我的意思是，在過去的兩個月裡，我們看到了贊助商的許多交易。這些關係非常有建設性。我想您很快就會在這裡看到我們將能夠宣布的一些招聘信息。我認為其中一件令人謙卑的事情是，在這個過程中，有很多人聯繫我們，因為平台的實力而有興趣加入平台。

If I may, Eric, the BDC management team as it sits today is substantially unchanged from where we were a year ago. And that's whenever we put in place the kind of refined go-forward investment strategy that has been consistent for the past 12 months I would say that in light of the fact that the overwhelming majority of the investment team is unchanged, we have no reason to change our strategy on a go-forward basis. And so while there may be some some management modifications throughout our manager, it's important to note that we don't have reason to change our strategy and feel like the strategy we put in place. He's an incredibly productive one with respect to our shareholders.

Eric，請容許我告訴您，今天的 BDC 管理團隊基本上與一年前相比沒有變化。每當我們實施過去 12 個月以來一直一致的完善的前瞻性投資策略時，我想說的是，鑑於投資團隊的絕大多數成員沒有改變，我們沒有理由在前進的基礎上改變我們的策略。因此，雖然我們的經理可能會進行一些管理調整，但重要的是要注意，我們沒有理由改變我們的策略，也沒有感覺就像我們所實施的策略一樣。對我們的股東來說，他是一位非常有效率的人。

Thanks, everyone.

感謝大家。

Kyle Joseph with Jefferies.

凱爾·約瑟夫和杰弗里斯。

Please proceed with your question and on Damang as they should take my questions kind of shifting back to the model a little bit. I think you mentioned this, but just wanted to talk about the decline in investment income in the quarter on either some portfolio growth, it looks like yields are stable, that Canada's fee income driven. Is that timing of deployments and repayments? Or and then I think you did mention the Eclipse dividend income and impacting that as well?

請繼續回答你的問題和關於 Damang 的問題，因為他們應該把我的問題稍微轉移回模型。我想你提到了這一點，但只是想談談本季投資收入的下降，因為一些投資組合成長，看起來收益率穩定，這是加拿大的費用收入驅動的。這是部署和還款的時間嗎？或者我認為您確實提到了 Eclipse 股息收入並對其產生了影響？

Sure.

當然。

Thanks, Hal.

謝謝，哈爾。

Yes, and interest income was down slightly quarter over quarter, and that really was related to the fact that we had late fourth quarter sales and repayments early first quarter repayments, and then we redeployed those later in the first quarter. So that was more of a timing issue from the interest income perspective. And in addition, dividend income was down quarter over quarter due to Eclipse.

是的，利息收入逐季略有下降，這確實與我們第四季末的銷售和第一季初期的還款有關，然後我們在第一季稍後重新部署了這些款項。因此，從利息收入的角度來看，這更多的是一個時機問題。此外，由於 Eclipse，股息收入較上季下降。

We also have lower dividend income at Sierra JV for the CRJV., we decided to take some of the proceeds from investment income and repayments and pay down part of the leverage facility we have there. So we can expect that this year, our dividend should be more normalized throughout the remainder of 2024.

我們在 Sierra JV 的 CRJV 的股息收入也較低。因此，我們可以預期，今年我們的股利在 2024 年剩餘時間內應該會更加正常化。

With that, I just want to highlight that the leftover decreased dividend off of Eclipse is not anything related to performance of Eclipse. That continues to be an incredibly strong performer for us. It's just timing of distributions.

說到這裡，我只想強調，Eclipse 剩餘的減少股息與 Eclipse 的表現沒有任何關係。對我們來說，這仍然是一個令人難以置信的強勁表現。這只是分配的時間。

And yes, you should see it back at a more normalized level for the second quarter and yet as a.

是的，你應該看到第二季度它回到了更正常化的水平，但仍然是一個。

And then a follow-up for me, probably for Matt, appreciate the margin commentary you gave. But from our side, we've been seeing different headlines about banks exiting the space from Basel three endgame or getting back in. We have DSL.

然後是我（可能是馬特）的後續行動，感謝您給出的邊際評論。但從我們這邊來看，我們看到了有關銀行退出巴塞爾三項殘局或重返該領域的不同頭條新聞。我們有DSL。

But just give us a sense for the competitive trends you've been seeing recently in kind of a we're talking about yields being, say stable would give us a break down between base rates and the spreads you've been seeing in recent quarters?

但是，請讓我們了解您最近看到的競爭趨勢，我們正在談論收益率，並說穩定會讓我們對基本利率和您最近幾季看到的利差之間進行細分？

Yes, happy to comment on it. So I think that what we're observing in the marketplace is kind of a bifurcation based on size. And so the first group of issuers that I think has been more substantively impact is going to be the larger end of the ecosystem. And I would tell you that our larger competitors who are competing squarely against the banking institutions aren't frankly, have a more more robust opportunity set from an issuance perspective than they have over the past few years.

是的，很高興對此發表評論。所以我認為我們在市場上觀察到的是基於規模的分歧。因此，我認為具有更實質影響的第一批發行人將是生態系統中較大的一端。我想告訴你，坦白說，從發行的角度來看，與銀行機構直接競爭的較大競爭對手並不比過去幾年擁有更強大的機會。

And so as we think about your $120 million and $150 million EBITDA platform that is kind of deciding between a broadly syndicated execution or a privately placed solution that those terms in our experience are looking closer and closer to parity than they have over the past few years.

因此，當我們考慮您的1.2 億美元和1.5 億美元EBITDA 平台時，該平台在廣泛的銀團執行或私募解決方案之間做出決定，根據我們的經驗，這些條款比過去幾年看起來越來越接近平價。

Now, whenever we start looking at at the core of the market in which we participate, call it sub [50] of EBITDA, I think the median issuer in the portfolio is just over [30]. That isn't really a competitive threat, but the banks don't provide a competitive threat to the same degree to be very candid with you, though, we are seeing more private credit fund formation. And so we are aware that that may provide some competitive competitive headwind here in the quarters to come.

現在，每當我們開始關注我們參與的市場核心時，將其稱為 EBITDA 的子 [50]，我認為投資組合中的中位數發行人剛剛超過[30]。這並不是真正的競爭威脅，但坦白說，銀行並沒有提供同等程度的競爭威脅，不過，我們看到更多的私人信貸基金成立。因此我們意識到，這可能會在未來幾季帶來一些競爭性的逆風。

But based on what we experienced during this particular quarter. We feel very encouraged. And so as we kind of set our path forward for the balance of 2024, I think that what we're anticipating is to see a highly competitive environment on the larger end of the ecosystem and perhaps a little bit more kind of price stability as it were with respect to what we define as the core of the middle market because are you thinking of kind of supply demand, right?

但根據我們在這個特定季度的經驗。我們感到深受鼓舞。因此，當我們為 2024 年的平衡設定前進的道路時，我認為我們期望的是在生態系統的更廣泛的一端看到一個高度競爭的環境，並且可能會出現更多的價格穩定性。關於我們定義的中間市場的核心，因為你在考慮某種供應需求，對嗎？

Just there's there's a increase of private credit managers in general over the last couple of years. And M&A activity is lower than what it was two years ago. That is just generally going to lead to some form of spread compression in some shorter term period of time. But over time, we're seeing kind of reasonable stability and kind of what that spread level is because there's an absolute return that needs to occur for private credit investors overall.

只是過去幾年私人信貸經理的數量總體上有所增加。併購活動也低於兩年前。這通常會在短期內導致某種形式的價差壓縮。但隨著時間的推移，我們看到了合理的穩定性和利差水平，因為整體私人信貸投資者需要絕對回報。

Very helpful. Thanks for answering my questions.

很有幫助。謝謝回答我的問題。

Robert Dodd with Raymond James.

羅伯特·多德和雷蒙德·詹姆斯。

Morning, everyone, and thanks for all the color about the events of magic on. Just one quick one for me, Matt, you mentioned the conversion rates or close rates for transactions on a trending towards historic levels. Can you give us any color on the drivers?

大家早安，感謝所有關於魔法事件的色彩。馬特，我只想簡單說一下，您提到交易的轉換率或成交率正趨向歷史水準。您能為我們提供有關驅動程式的任何顏色嗎？

There is a bit. We have been asked some valuations for transactions not closing sufficiently important to the last minute. Is there failures in due diligence as you get more advanced? I mean, any color you can give us on what's the driver there?

有一點。我們被要求對直到最後一刻尚未結束的交易進行一些估值。隨著你的進步，盡職調查是否會失敗？我的意思是，您可以給我們提供有關驅動程式的顏色嗎？

Yes. I are the most common response that we're getting is that there just seems to be a bid-ask differential that I think a lot of folks anticipated a reduction in interest rates would have helped bridge until you recall, I'm sure everyone knows that these processes take between three and six months by the time you launch a transaction to when you actually close it. We're somewhere in the middle of the beginning or somewhere between the beginning in the middle of that process.

是的。我們得到的最常見的反應是，似乎存在買賣差價，我認為很多人預計利率降低將有助於彌合這種差價，直到你記得，我相信每個人都知道從您啟動交易到實際關閉交易，這些過程需要三到六個月的時間。我們正處於這個過程的開始中間或中間的某個位置。

And so as these kind of sell-side transactions have evolved, you get part of the way through and you recognize that your cost of capital isn't ultimately what you had had budgeted for. And I think that that creates some downward revisions on enterprise values. And as we think about it that obviously impacts the the equity pretty substantially, but it's but we generally feel pretty comfortable regardless of whether someone is paying, call it 10 times or 12 times.

因此，隨著此類賣方交易的發展，您已經完成了一部分，並且您認識到您的資本成本最終並不符合您的預算。我認為這會對企業價值造成一些向下修正。正如我們所想，這顯然對權益有相當大的影響，但無論有人是否付費，我們通常都會感覺很舒服，稱之為 10 倍或 12 倍。

And so ultimately, our view on the credit profiles don't often change, but there obviously is some capital below us. And when that cost of capital is changed, it creates revision its expectations with respect to underlying EBIT. So that's our leading contender right now. Of course, there are going to be transactions where they ultimately fall apart over kind of credit or other what other performance metrics. But I think overwhelmingly, it's been a cost of capital discussion and I omitted misalignment of expectations on the bid ask spread.

因此，最終，我們對信用狀況的看法不會經常改變，但顯然有些資本低於我們。當資本成本改變時，就會導致對基本息稅前利潤的預期發生修正。所以這是我們現在的主要競爭者。當然，有些交易最終會因信用類型或其他績效指標而破裂。但我認為，絕大多數情況下，這是資本成本的討論，我忽略了買賣價差預期的偏差。

Got it.

知道了。

Thank you.

謝謝。

Thank you. We have no additional questions at this time. So I'd like to pass the floor back over to management for closing comments.

謝謝。目前我們沒有其他問題。因此，我想將發言權交還給管理層以徵求結束意見。

Well, first, I want to thank everybody for dialing in and taking the time to listen to what we communicated today. To extent you have follow-up questions or conversations you'd like to have, please make sure you reach out to us and the team. We want to make sure we're transparent and communicative as we go forward over the course of the next quarters. Thanks so much.

首先，我要感謝大家撥打電話並花時間聆聽我們今天的交流內容。如果您有後續問題或想要進行對話，請務必聯絡我們和我們的團隊。我們希望確保在接下來的幾個季度中我們保持透明和溝通。非常感謝。

Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation and you may disconnect your lines at this time.

女士們、先生們，今天的電話會議到此結束。我們感謝您的參與，此時您可以斷開線路。