Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Bain Capital Specialty Finance, Inc. Announces June 30, 2023 Financial Results and Declares Third Quarter 2023 Dividend of $0.42 per Share By: Bain Capital Specialty Finance, Inc. via Business Wire August 08, 2023 at 17:13 PM EDT Bain Capital Specialty Finance, Inc. (NYSE: BCSF, the “Company”, “our” or “we”) today announced financial results for the second quarter ended June 30, 2023, and that its Board of Directors has declared a dividend of $0.42 per share for the third quarter of 2023. “Our net investment income increased 20% quarter-over-quarter driven by the continued benefits of higher interest rates across our well-diversified portfolio of largely senior secured, floating rate loans,” said Michael Ewald, Chief Executive Officer of BCSF. “As a result of the Company’s strong earnings and the continued stable credit performance across our high-quality portfolio, we are raising our regular quarterly dividend by 10.5% to $0.42 per share, which represents the third increase for our shareholders in the past twelve months.” QUARTERLY HIGHLIGHTS Net investment income (NII) per share was $0.60, equating to an annualized NII yield on book value of 13.9%(1); Net income per share was $0.45, equating to an annualized return on book value of 10.4%(1); Net asset value per share as of June 30, 2023 was $17.44, as compared to $17.37 as of March 31, 2023; Gross and net investment fundings were $197.5 million and $(30.3) million, respectively; Ending net debt-to-equity was 1.13x, as compared to 1.16x as of March 31, 2023(2); and Subsequent to quarter-end, the Company’s Board of Directors increased its regular quarterly dividend by $0.04 per share to $0.42 per share for the third quarter of 2023 payable to stockholders of record as of September 29, 2023(3). SELECTED FINANCIAL HIGHLIGHTS ($ in millions, unless otherwise noted) Q2 2023 Q1 2023 Net investment income per share $0.60 $0.50 Net investment income $38.9 $32.2 Earnings per share $0.45 $0.45 Dividends per share declared and payable $0.38 $0.38 ($ in millions, unless otherwise noted) As of June 30, 2023 As of March 31, 2023 Total fair value of investments $2,385.3 $2,415.4 Total assets $2,675.4 $2,606.4 Total net assets $1,125.8 $1,121.1 Net asset value per share $17.44 $17.37 PORTFOLIO AND INVESTMENT ACTIVITY For the three months ended June 30, 2023, the Company invested $197.5 million in 46 portfolio companies, including $119.8 million in six new companies, $47.7 million in 39 existing companies and $30.0 million in Senior Loan Program, LLC (“SLP”). The Company had $227.8 million of principal repayments and sales in the quarter, resulting in net investment fundings of $(30.3) million. Investment Activity for the Quarter Ended June 30, 2023: ($ in millions) Q2 2023 Q1 2023 Investment Fundings $197.5 $308.0 Sales and Repayments $227.8 $285.4 Net Investment Activity $(30.3) $22.6 As of June 30, 2023, the Company’s investment portfolio had a fair value of $2,385.3 million, comprised of investments in 142 portfolio companies operating across 30 different industries. Investment Portfolio at Fair Value as of June 30, 2023: Investment Type $ in Millions % of Total First Lien Senior Secured Loans $1,532.4 64.2% Second Lien Senior Secured Loans 85.8 3.6 Subordinated Debt 44.5 1.9 Structured Products 23.2 1.0 Preferred Equity 99.6 4.2 Equity Interests 229.7 9.6 Warrants 0.5 0.0 Investment Vehicles 369.6 15.5 Subordinated Note in ISLP 187.0 7.8 Equity Interest in ISLP 65.8 2.8 Subordinated Note in SLP 116.0 4.9 Preferred and Equity Interest in SLP 0.8 0.0 Total $2,385.3 100.0% As of June 30, 2023, the weighted average yield on the investment portfolio at amortized cost and fair value were 12.8% and 13.0%, respectively, as compared to 12.3% and 12.5%, respectively, as of March 31, 2023.(4) 94.1% of the Company’s debt investments at fair value were in floating rate securities. As of June 30, 2023, two portfolio companies were on non-accrual status, representing 2.1% and 0.0% of the total investment portfolio at amortized cost and fair value, respectively. As of June 30, 2023, ISLP’s investment portfolio had an aggregate fair value of $686.6 million, comprised of investments in 39 portfolio companies operating across 19 different industries. The investment portfolio on a fair value basis was comprised of 93.7% first lien senior secured loans, 3.0% second lien senior secured loans and 3.3% equity interests. 100% of ISLP’s debt investments at fair value were in floating rate securities. As of June 30, 2023, SLP’s investment portfolio had an aggregate fair value of $830.1 million, comprised of investments in 60 portfolio companies operating across 25 different industries.(5) The investment portfolio on a fair value basis was comprised of 97.4% first lien senior secured loans and 2.6% second lien senior secured loans. 98.9% of SLP’s debt investments at fair value were in floating rate securities. RESULTS OF OPERATIONS For the three months ended June 30, 2023 and March 31, 2023, total investment income was $75.7 million and $74.7 million, respectively. The increase in investment income was primarily due to an increase in interest income as a result of higher base rates, partially offset by lower other income. Total expenses (before taxes) for the three months ended June 30, 2023 and March 31, 2023 were $35.7 million and $42.0 million, respectively. Net investment income for the three months ended June 30, 2023 and March 31, 2023 was $38.9 million or $0.60 per share and $32.2 million or $0.50 per share, respectively. During the three months ended June 30, 2023, the Company had net realized and unrealized gains (losses) of $(9.7) million. Net increase in net assets resulting from operations for the three months ended June 30, 2023 was $29.2 million, or $0.45 per share. CAPITAL AND LIQUIDITY As of June 30, 2023, the Company had total principal debt outstanding of $1,498.5 million, including $546.0 million outstanding in the Company’s Sumitomo Credit Facility, $352.5 million outstanding of the debt issued through BCC Middle Market CLO 2019-1 LLC, $300.0 million outstanding in the Company’s senior unsecured notes due March 2026 and $300.0 million outstanding in the Company’s senior unsecured notes due October 2026. For the three months ended June 30, 2023, the weighted average interest rate on debt outstanding was 5.2%, as compared to 5.0% for the three months ended March 31, 2023. As of June 30, 2023, the Company had cash and cash equivalents (including foreign cash) of $92.3 million, restricted cash and cash equivalents of $36.2 million, $95.7 million of unsettled trades, net of receivables and payables of investments, and $104.3 million of capacity under its Sumitomo Credit Facility. As of June 30, 2023, the Company had $276.0 million of undrawn investment commitments. As of June 30, 2023, the Company’s debt-to-equity and net debt-to-equity ratios were 1.33x and 1.13x, respectively, as compared to 1.26x and 1.16x, respectively, as of March 31, 2023(2). Endnotes Net investment income yields and net income returns are calculated on average net assets, or book value, for the respective periods shown. Net debt-to-equity represents principal debt outstanding less cash and cash equivalents and unsettled trades, net of receivables and payables of investments. The third quarter dividend is payable on October 31, 2023 to holders of record as of September 29, 2023. The weighted average yield is computed as (a) the annual stated interest rate or yield earned on the relevant accruing debt and other income producing securities plus amortization of fees and discounts on the performing debt and other income producing investments, divided by (b) the total relevant investments at amortized cost or fair value. The weighted average yield does not represent the total return to our stockholders. SLP acquired 70% of the member equity interests of the Company’s 2018-1 portfolio (“2018-1”). The Company retained 30% of the 2018-1 membership interests as a non-controlling equity interest. CONFERENCE CALL INFORMATION A conference call to discuss the Company’s financial results will be held live at 8:30 a.m. Eastern Time on August 9, 2023. Please visit BCSF’s webcast link located on the Events & Presentations page of the Investor Resources section of BCSF’s website at http://www.baincapitalspecialtyfinance.com for a slide presentation that complements the Earnings Conference Call. Participants are also invited to access the conference call by dialing one of the following numbers: Domestic: 1-888-886-7786 International: 1-416-764-8658 Conference ID: 50402553 All participants will need to reference “Bain Capital Specialty Finance - Second Quarter Ended June 30, 2023 Earnings Conference Call” once connected with the operator. All participants are asked to dial in 10-15 minutes prior to the call. Replay Information: An archived replay will be available approximately three hours after the conference call concludes through August 16, 2023 via a webcast link located on the Investor Resources section of BCSF’s website, and via the dial-in numbers listed below: Domestic: 1-844-512-2921 International: 1-412-317-6671 Conference ID: 50402553 Bain Capital Specialty Finance, Inc. Consolidated Statements of Assets and Liabilities (in thousands, except share and per share data) As of As of 30-Jun-23 31-Dec-22 (Unaudited) Assets Investments at fair value: Non-controlled/non-affiliate investments (amortized cost of $1,745,841 and $1,846,172, respectively) $ 1,669,079 $ 1,774,947 Non-controlled/affiliate investment (amortized cost of $149,376 and $133,808, respectively) 191,995 173,400 Controlled affiliate investment (amortized cost of $520,410 and $439,958, respectively) 524,198 438,630 Cash and cash equivalents 87,727 30,205 Foreign cash (cost of $5,203 and $34,528, respectively) 4,612 29,575 Restricted cash and cash equivalents 36,243 65,950 Collateral on forward currency exchange contracts 7,545 9,612 Deferred financing costs 3,276 3,742 Interest receivable on investments 40,342 34,270 Receivable for sales and paydowns of investments 95,893 18,166 Prepaid Insurance 605 194 Unrealized appreciation on forward currency exchange contracts 55 62 Dividend receivable 13,818 13,681 Total Assets $ 2,675,388 $ 2,592,434 Liabilities Debt (net of unamortized debt issuance costs of $8,893 and $10,197, respectively) $ 1,489,607 $ 1,385,303 Interest payable 15,897 12,130 Payable for investments purchased 233 34,292 Base management fee payable 9,116 8,906 Incentive fee payable 4,008 9,216 Unrealized depreciation on forward currency exchange contracts 1,308 — Accounts payable and accrued expenses 4,906 2,954 Distributions payable 24,534 23,242 Total Liabilities 1,549,609 1,476,043 Commitments and Contingencies (See Note 10) Net Assets Common stock, par value $0.001 per share, 100,000,000,000 and 100,000,000,000 shares authorized, 64,562,265 and 64,562,265 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively 65 65 Paid in capital in excess of par value 1,168,384 1,168,384 Total distributable loss (42,670) (52,058) Total Net Assets 1,125,779 1,116,391 Total Liabilities and Total Net Assets $ 2,675,388 $ 2,592,434 Net asset value per share $ 17.44 $ 17.29 See Notes to Consolidated Financial Statements Bain Capital Specialty Finance, Inc. Consolidated Statements of Operations (in thousands, except share and per share data) (Unaudited) For the Three Months Ended June 30 For the Three Months Ended June 30 2023 2022 Income Investment income from non-controlled/non-affiliate investments: Interest from investments $ 47,101 $ 29,769 Dividend income 61 — PIK income 6,249 2,375 Other income 1,922 7,690 Total investment income from non-controlled/non-affiliate investments 55,333 39,834 Investment income from non-controlled/affiliate investments: Interest from investments 2,525 1,901 Dividend income 1,630 1,851 PIK income 628 45 Total investment income from non-controlled/affiliate investments 4,783 3,797 Investment income from controlled affiliate investments: Interest from investments 8,562 4,214 Dividend income 7,037 4,519 Total investment income from controlled affiliate investments 15,599 8,733 Total investment income 75,715 52,364 Expenses Interest and debt financing expenses 20,459 11,027 Base management fee 9,116 8,451 Incentive fee 4,008 4,069 Professional fees 451 446 Directors fees 179 179 Other general and administrative expenses 1,493 1,477 Total expenses, net of fee waivers 35,706 25,649 Net investment income before taxes 40,009 26,715 Income tax expense, including excise tax 1,097 — Net investment income 38,912 26,715 Net realized and unrealized gains (losses) Net realized loss on non-controlled/non-affiliate investments (229) (2,576) Net realized gain (loss) on foreign currency transactions (321) 3,166 Net realized gain (loss) on forward currency exchange contracts — 2,018 Net change in unrealized appreciation on foreign currency translation 127 (2,051) Net change in unrealized appreciation on forward currency exchange contracts (1,476) 8,124 Net change in unrealized appreciation on non-controlled/non-affiliate investments (6,925) (27,206) Net change in unrealized appreciation on non-controlled/affiliate investments (432) 9,102 Net change in unrealized appreciation on controlled affiliate investments (485) (63) Total net gains (losses) (9,741) (9,486) Net increase in net assets resulting from operations $ 29,171 $ 17,229 Basic and diluted net investment income per common share $ 0.60 $ 0.41 Basic and diluted increase in net assets resulting from operations per common share $ 0.45 $ 0.27 Basic and diluted weighted average common shares outstanding 64,562,265 64,562,265 About Bain Capital Specialty Finance, Inc. Bain Capital Specialty Finance, Inc. is an externally managed specialty finance company focused on lending to middle market companies. BCSF is managed by BCSF Advisors, LP, an SEC-registered investment adviser and a subsidiary of Bain Capital Credit, LP. Since commencing investment operations on October 13, 2016, and through June 30, 2023, BCSF has invested approximately $6.8 billion in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments. BCSF’s investment objective is to generate current income and, to a lesser extent, capital appreciation through direct originations of secured debt, including first lien, first lien/last out, unitranche and second lien debt, investments in strategic joint ventures, equity investments and, to a lesser extent, corporate bonds. BCSF has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. Forward-Looking Statements This letter may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this letter may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the U.S. Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this letter. View source version on businesswire.com: https://www.businesswire.com/news/home/20230808429984/en/Contacts Investor Contact: Katherine Schneider Tel. (212) 803-9613 investors@baincapitalbdc.com Media Contact: Charlyn Lusk Tel. (646) 502-3549 clusk@stantonprm.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Bain Capital Specialty Finance, Inc. Announces June 30, 2023 Financial Results and Declares Third Quarter 2023 Dividend of $0.42 per Share By: Bain Capital Specialty Finance, Inc. via Business Wire August 08, 2023 at 17:13 PM EDT Bain Capital Specialty Finance, Inc. (NYSE: BCSF, the “Company”, “our” or “we”) today announced financial results for the second quarter ended June 30, 2023, and that its Board of Directors has declared a dividend of $0.42 per share for the third quarter of 2023. “Our net investment income increased 20% quarter-over-quarter driven by the continued benefits of higher interest rates across our well-diversified portfolio of largely senior secured, floating rate loans,” said Michael Ewald, Chief Executive Officer of BCSF. “As a result of the Company’s strong earnings and the continued stable credit performance across our high-quality portfolio, we are raising our regular quarterly dividend by 10.5% to $0.42 per share, which represents the third increase for our shareholders in the past twelve months.” QUARTERLY HIGHLIGHTS Net investment income (NII) per share was $0.60, equating to an annualized NII yield on book value of 13.9%(1); Net income per share was $0.45, equating to an annualized return on book value of 10.4%(1); Net asset value per share as of June 30, 2023 was $17.44, as compared to $17.37 as of March 31, 2023; Gross and net investment fundings were $197.5 million and $(30.3) million, respectively; Ending net debt-to-equity was 1.13x, as compared to 1.16x as of March 31, 2023(2); and Subsequent to quarter-end, the Company’s Board of Directors increased its regular quarterly dividend by $0.04 per share to $0.42 per share for the third quarter of 2023 payable to stockholders of record as of September 29, 2023(3). SELECTED FINANCIAL HIGHLIGHTS ($ in millions, unless otherwise noted) Q2 2023 Q1 2023 Net investment income per share $0.60 $0.50 Net investment income $38.9 $32.2 Earnings per share $0.45 $0.45 Dividends per share declared and payable $0.38 $0.38 ($ in millions, unless otherwise noted) As of June 30, 2023 As of March 31, 2023 Total fair value of investments $2,385.3 $2,415.4 Total assets $2,675.4 $2,606.4 Total net assets $1,125.8 $1,121.1 Net asset value per share $17.44 $17.37 PORTFOLIO AND INVESTMENT ACTIVITY For the three months ended June 30, 2023, the Company invested $197.5 million in 46 portfolio companies, including $119.8 million in six new companies, $47.7 million in 39 existing companies and $30.0 million in Senior Loan Program, LLC (“SLP”). The Company had $227.8 million of principal repayments and sales in the quarter, resulting in net investment fundings of $(30.3) million. Investment Activity for the Quarter Ended June 30, 2023: ($ in millions) Q2 2023 Q1 2023 Investment Fundings $197.5 $308.0 Sales and Repayments $227.8 $285.4 Net Investment Activity $(30.3) $22.6 As of June 30, 2023, the Company’s investment portfolio had a fair value of $2,385.3 million, comprised of investments in 142 portfolio companies operating across 30 different industries. Investment Portfolio at Fair Value as of June 30, 2023: Investment Type $ in Millions % of Total First Lien Senior Secured Loans $1,532.4 64.2% Second Lien Senior Secured Loans 85.8 3.6 Subordinated Debt 44.5 1.9 Structured Products 23.2 1.0 Preferred Equity 99.6 4.2 Equity Interests 229.7 9.6 Warrants 0.5 0.0 Investment Vehicles 369.6 15.5 Subordinated Note in ISLP 187.0 7.8 Equity Interest in ISLP 65.8 2.8 Subordinated Note in SLP 116.0 4.9 Preferred and Equity Interest in SLP 0.8 0.0 Total $2,385.3 100.0% As of June 30, 2023, the weighted average yield on the investment portfolio at amortized cost and fair value were 12.8% and 13.0%, respectively, as compared to 12.3% and 12.5%, respectively, as of March 31, 2023.(4) 94.1% of the Company’s debt investments at fair value were in floating rate securities. As of June 30, 2023, two portfolio companies were on non-accrual status, representing 2.1% and 0.0% of the total investment portfolio at amortized cost and fair value, respectively. As of June 30, 2023, ISLP’s investment portfolio had an aggregate fair value of $686.6 million, comprised of investments in 39 portfolio companies operating across 19 different industries. The investment portfolio on a fair value basis was comprised of 93.7% first lien senior secured loans, 3.0% second lien senior secured loans and 3.3% equity interests. 100% of ISLP’s debt investments at fair value were in floating rate securities. As of June 30, 2023, SLP’s investment portfolio had an aggregate fair value of $830.1 million, comprised of investments in 60 portfolio companies operating across 25 different industries.(5) The investment portfolio on a fair value basis was comprised of 97.4% first lien senior secured loans and 2.6% second lien senior secured loans. 98.9% of SLP’s debt investments at fair value were in floating rate securities. RESULTS OF OPERATIONS For the three months ended June 30, 2023 and March 31, 2023, total investment income was $75.7 million and $74.7 million, respectively. The increase in investment income was primarily due to an increase in interest income as a result of higher base rates, partially offset by lower other income. Total expenses (before taxes) for the three months ended June 30, 2023 and March 31, 2023 were $35.7 million and $42.0 million, respectively. Net investment income for the three months ended June 30, 2023 and March 31, 2023 was $38.9 million or $0.60 per share and $32.2 million or $0.50 per share, respectively. During the three months ended June 30, 2023, the Company had net realized and unrealized gains (losses) of $(9.7) million. Net increase in net assets resulting from operations for the three months ended June 30, 2023 was $29.2 million, or $0.45 per share. CAPITAL AND LIQUIDITY As of June 30, 2023, the Company had total principal debt outstanding of $1,498.5 million, including $546.0 million outstanding in the Company’s Sumitomo Credit Facility, $352.5 million outstanding of the debt issued through BCC Middle Market CLO 2019-1 LLC, $300.0 million outstanding in the Company’s senior unsecured notes due March 2026 and $300.0 million outstanding in the Company’s senior unsecured notes due October 2026. For the three months ended June 30, 2023, the weighted average interest rate on debt outstanding was 5.2%, as compared to 5.0% for the three months ended March 31, 2023. As of June 30, 2023, the Company had cash and cash equivalents (including foreign cash) of $92.3 million, restricted cash and cash equivalents of $36.2 million, $95.7 million of unsettled trades, net of receivables and payables of investments, and $104.3 million of capacity under its Sumitomo Credit Facility. As of June 30, 2023, the Company had $276.0 million of undrawn investment commitments. As of June 30, 2023, the Company’s debt-to-equity and net debt-to-equity ratios were 1.33x and 1.13x, respectively, as compared to 1.26x and 1.16x, respectively, as of March 31, 2023(2). Endnotes Net investment income yields and net income returns are calculated on average net assets, or book value, for the respective periods shown. Net debt-to-equity represents principal debt outstanding less cash and cash equivalents and unsettled trades, net of receivables and payables of investments. The third quarter dividend is payable on October 31, 2023 to holders of record as of September 29, 2023. The weighted average yield is computed as (a) the annual stated interest rate or yield earned on the relevant accruing debt and other income producing securities plus amortization of fees and discounts on the performing debt and other income producing investments, divided by (b) the total relevant investments at amortized cost or fair value. The weighted average yield does not represent the total return to our stockholders. SLP acquired 70% of the member equity interests of the Company’s 2018-1 portfolio (“2018-1”). The Company retained 30% of the 2018-1 membership interests as a non-controlling equity interest. CONFERENCE CALL INFORMATION A conference call to discuss the Company’s financial results will be held live at 8:30 a.m. Eastern Time on August 9, 2023. Please visit BCSF’s webcast link located on the Events & Presentations page of the Investor Resources section of BCSF’s website at http://www.baincapitalspecialtyfinance.com for a slide presentation that complements the Earnings Conference Call. Participants are also invited to access the conference call by dialing one of the following numbers: Domestic: 1-888-886-7786 International: 1-416-764-8658 Conference ID: 50402553 All participants will need to reference “Bain Capital Specialty Finance - Second Quarter Ended June 30, 2023 Earnings Conference Call” once connected with the operator. All participants are asked to dial in 10-15 minutes prior to the call. Replay Information: An archived replay will be available approximately three hours after the conference call concludes through August 16, 2023 via a webcast link located on the Investor Resources section of BCSF’s website, and via the dial-in numbers listed below: Domestic: 1-844-512-2921 International: 1-412-317-6671 Conference ID: 50402553 Bain Capital Specialty Finance, Inc. Consolidated Statements of Assets and Liabilities (in thousands, except share and per share data) As of As of 30-Jun-23 31-Dec-22 (Unaudited) Assets Investments at fair value: Non-controlled/non-affiliate investments (amortized cost of $1,745,841 and $1,846,172, respectively) $ 1,669,079 $ 1,774,947 Non-controlled/affiliate investment (amortized cost of $149,376 and $133,808, respectively) 191,995 173,400 Controlled affiliate investment (amortized cost of $520,410 and $439,958, respectively) 524,198 438,630 Cash and cash equivalents 87,727 30,205 Foreign cash (cost of $5,203 and $34,528, respectively) 4,612 29,575 Restricted cash and cash equivalents 36,243 65,950 Collateral on forward currency exchange contracts 7,545 9,612 Deferred financing costs 3,276 3,742 Interest receivable on investments 40,342 34,270 Receivable for sales and paydowns of investments 95,893 18,166 Prepaid Insurance 605 194 Unrealized appreciation on forward currency exchange contracts 55 62 Dividend receivable 13,818 13,681 Total Assets $ 2,675,388 $ 2,592,434 Liabilities Debt (net of unamortized debt issuance costs of $8,893 and $10,197, respectively) $ 1,489,607 $ 1,385,303 Interest payable 15,897 12,130 Payable for investments purchased 233 34,292 Base management fee payable 9,116 8,906 Incentive fee payable 4,008 9,216 Unrealized depreciation on forward currency exchange contracts 1,308 — Accounts payable and accrued expenses 4,906 2,954 Distributions payable 24,534 23,242 Total Liabilities 1,549,609 1,476,043 Commitments and Contingencies (See Note 10) Net Assets Common stock, par value $0.001 per share, 100,000,000,000 and 100,000,000,000 shares authorized, 64,562,265 and 64,562,265 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively 65 65 Paid in capital in excess of par value 1,168,384 1,168,384 Total distributable loss (42,670) (52,058) Total Net Assets 1,125,779 1,116,391 Total Liabilities and Total Net Assets $ 2,675,388 $ 2,592,434 Net asset value per share $ 17.44 $ 17.29 See Notes to Consolidated Financial Statements Bain Capital Specialty Finance, Inc. Consolidated Statements of Operations (in thousands, except share and per share data) (Unaudited) For the Three Months Ended June 30 For the Three Months Ended June 30 2023 2022 Income Investment income from non-controlled/non-affiliate investments: Interest from investments $ 47,101 $ 29,769 Dividend income 61 — PIK income 6,249 2,375 Other income 1,922 7,690 Total investment income from non-controlled/non-affiliate investments 55,333 39,834 Investment income from non-controlled/affiliate investments: Interest from investments 2,525 1,901 Dividend income 1,630 1,851 PIK income 628 45 Total investment income from non-controlled/affiliate investments 4,783 3,797 Investment income from controlled affiliate investments: Interest from investments 8,562 4,214 Dividend income 7,037 4,519 Total investment income from controlled affiliate investments 15,599 8,733 Total investment income 75,715 52,364 Expenses Interest and debt financing expenses 20,459 11,027 Base management fee 9,116 8,451 Incentive fee 4,008 4,069 Professional fees 451 446 Directors fees 179 179 Other general and administrative expenses 1,493 1,477 Total expenses, net of fee waivers 35,706 25,649 Net investment income before taxes 40,009 26,715 Income tax expense, including excise tax 1,097 — Net investment income 38,912 26,715 Net realized and unrealized gains (losses) Net realized loss on non-controlled/non-affiliate investments (229) (2,576) Net realized gain (loss) on foreign currency transactions (321) 3,166 Net realized gain (loss) on forward currency exchange contracts — 2,018 Net change in unrealized appreciation on foreign currency translation 127 (2,051) Net change in unrealized appreciation on forward currency exchange contracts (1,476) 8,124 Net change in unrealized appreciation on non-controlled/non-affiliate investments (6,925) (27,206) Net change in unrealized appreciation on non-controlled/affiliate investments (432) 9,102 Net change in unrealized appreciation on controlled affiliate investments (485) (63) Total net gains (losses) (9,741) (9,486) Net increase in net assets resulting from operations $ 29,171 $ 17,229 Basic and diluted net investment income per common share $ 0.60 $ 0.41 Basic and diluted increase in net assets resulting from operations per common share $ 0.45 $ 0.27 Basic and diluted weighted average common shares outstanding 64,562,265 64,562,265 About Bain Capital Specialty Finance, Inc. Bain Capital Specialty Finance, Inc. is an externally managed specialty finance company focused on lending to middle market companies. BCSF is managed by BCSF Advisors, LP, an SEC-registered investment adviser and a subsidiary of Bain Capital Credit, LP. Since commencing investment operations on October 13, 2016, and through June 30, 2023, BCSF has invested approximately $6.8 billion in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments. BCSF’s investment objective is to generate current income and, to a lesser extent, capital appreciation through direct originations of secured debt, including first lien, first lien/last out, unitranche and second lien debt, investments in strategic joint ventures, equity investments and, to a lesser extent, corporate bonds. BCSF has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. Forward-Looking Statements This letter may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this letter may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the U.S. Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this letter. View source version on businesswire.com: https://www.businesswire.com/news/home/20230808429984/en/Contacts Investor Contact: Katherine Schneider Tel. (212) 803-9613 investors@baincapitalbdc.com Media Contact: Charlyn Lusk Tel. (646) 502-3549 clusk@stantonprm.com
Bain Capital Specialty Finance, Inc. (NYSE: BCSF, the “Company”, “our” or “we”) today announced financial results for the second quarter ended June 30, 2023, and that its Board of Directors has declared a dividend of $0.42 per share for the third quarter of 2023. “Our net investment income increased 20% quarter-over-quarter driven by the continued benefits of higher interest rates across our well-diversified portfolio of largely senior secured, floating rate loans,” said Michael Ewald, Chief Executive Officer of BCSF. “As a result of the Company’s strong earnings and the continued stable credit performance across our high-quality portfolio, we are raising our regular quarterly dividend by 10.5% to $0.42 per share, which represents the third increase for our shareholders in the past twelve months.” QUARTERLY HIGHLIGHTS Net investment income (NII) per share was $0.60, equating to an annualized NII yield on book value of 13.9%(1); Net income per share was $0.45, equating to an annualized return on book value of 10.4%(1); Net asset value per share as of June 30, 2023 was $17.44, as compared to $17.37 as of March 31, 2023; Gross and net investment fundings were $197.5 million and $(30.3) million, respectively; Ending net debt-to-equity was 1.13x, as compared to 1.16x as of March 31, 2023(2); and Subsequent to quarter-end, the Company’s Board of Directors increased its regular quarterly dividend by $0.04 per share to $0.42 per share for the third quarter of 2023 payable to stockholders of record as of September 29, 2023(3). SELECTED FINANCIAL HIGHLIGHTS ($ in millions, unless otherwise noted) Q2 2023 Q1 2023 Net investment income per share $0.60 $0.50 Net investment income $38.9 $32.2 Earnings per share $0.45 $0.45 Dividends per share declared and payable $0.38 $0.38 ($ in millions, unless otherwise noted) As of June 30, 2023 As of March 31, 2023 Total fair value of investments $2,385.3 $2,415.4 Total assets $2,675.4 $2,606.4 Total net assets $1,125.8 $1,121.1 Net asset value per share $17.44 $17.37 PORTFOLIO AND INVESTMENT ACTIVITY For the three months ended June 30, 2023, the Company invested $197.5 million in 46 portfolio companies, including $119.8 million in six new companies, $47.7 million in 39 existing companies and $30.0 million in Senior Loan Program, LLC (“SLP”). The Company had $227.8 million of principal repayments and sales in the quarter, resulting in net investment fundings of $(30.3) million. Investment Activity for the Quarter Ended June 30, 2023: ($ in millions) Q2 2023 Q1 2023 Investment Fundings $197.5 $308.0 Sales and Repayments $227.8 $285.4 Net Investment Activity $(30.3) $22.6 As of June 30, 2023, the Company’s investment portfolio had a fair value of $2,385.3 million, comprised of investments in 142 portfolio companies operating across 30 different industries. Investment Portfolio at Fair Value as of June 30, 2023: Investment Type $ in Millions % of Total First Lien Senior Secured Loans $1,532.4 64.2% Second Lien Senior Secured Loans 85.8 3.6 Subordinated Debt 44.5 1.9 Structured Products 23.2 1.0 Preferred Equity 99.6 4.2 Equity Interests 229.7 9.6 Warrants 0.5 0.0 Investment Vehicles 369.6 15.5 Subordinated Note in ISLP 187.0 7.8 Equity Interest in ISLP 65.8 2.8 Subordinated Note in SLP 116.0 4.9 Preferred and Equity Interest in SLP 0.8 0.0 Total $2,385.3 100.0% As of June 30, 2023, the weighted average yield on the investment portfolio at amortized cost and fair value were 12.8% and 13.0%, respectively, as compared to 12.3% and 12.5%, respectively, as of March 31, 2023.(4) 94.1% of the Company’s debt investments at fair value were in floating rate securities. As of June 30, 2023, two portfolio companies were on non-accrual status, representing 2.1% and 0.0% of the total investment portfolio at amortized cost and fair value, respectively. As of June 30, 2023, ISLP’s investment portfolio had an aggregate fair value of $686.6 million, comprised of investments in 39 portfolio companies operating across 19 different industries. The investment portfolio on a fair value basis was comprised of 93.7% first lien senior secured loans, 3.0% second lien senior secured loans and 3.3% equity interests. 100% of ISLP’s debt investments at fair value were in floating rate securities. As of June 30, 2023, SLP’s investment portfolio had an aggregate fair value of $830.1 million, comprised of investments in 60 portfolio companies operating across 25 different industries.(5) The investment portfolio on a fair value basis was comprised of 97.4% first lien senior secured loans and 2.6% second lien senior secured loans. 98.9% of SLP’s debt investments at fair value were in floating rate securities. RESULTS OF OPERATIONS For the three months ended June 30, 2023 and March 31, 2023, total investment income was $75.7 million and $74.7 million, respectively. The increase in investment income was primarily due to an increase in interest income as a result of higher base rates, partially offset by lower other income. Total expenses (before taxes) for the three months ended June 30, 2023 and March 31, 2023 were $35.7 million and $42.0 million, respectively. Net investment income for the three months ended June 30, 2023 and March 31, 2023 was $38.9 million or $0.60 per share and $32.2 million or $0.50 per share, respectively. During the three months ended June 30, 2023, the Company had net realized and unrealized gains (losses) of $(9.7) million. Net increase in net assets resulting from operations for the three months ended June 30, 2023 was $29.2 million, or $0.45 per share. CAPITAL AND LIQUIDITY As of June 30, 2023, the Company had total principal debt outstanding of $1,498.5 million, including $546.0 million outstanding in the Company’s Sumitomo Credit Facility, $352.5 million outstanding of the debt issued through BCC Middle Market CLO 2019-1 LLC, $300.0 million outstanding in the Company’s senior unsecured notes due March 2026 and $300.0 million outstanding in the Company’s senior unsecured notes due October 2026. For the three months ended June 30, 2023, the weighted average interest rate on debt outstanding was 5.2%, as compared to 5.0% for the three months ended March 31, 2023. As of June 30, 2023, the Company had cash and cash equivalents (including foreign cash) of $92.3 million, restricted cash and cash equivalents of $36.2 million, $95.7 million of unsettled trades, net of receivables and payables of investments, and $104.3 million of capacity under its Sumitomo Credit Facility. As of June 30, 2023, the Company had $276.0 million of undrawn investment commitments. As of June 30, 2023, the Company’s debt-to-equity and net debt-to-equity ratios were 1.33x and 1.13x, respectively, as compared to 1.26x and 1.16x, respectively, as of March 31, 2023(2). Endnotes Net investment income yields and net income returns are calculated on average net assets, or book value, for the respective periods shown. Net debt-to-equity represents principal debt outstanding less cash and cash equivalents and unsettled trades, net of receivables and payables of investments. The third quarter dividend is payable on October 31, 2023 to holders of record as of September 29, 2023. The weighted average yield is computed as (a) the annual stated interest rate or yield earned on the relevant accruing debt and other income producing securities plus amortization of fees and discounts on the performing debt and other income producing investments, divided by (b) the total relevant investments at amortized cost or fair value. The weighted average yield does not represent the total return to our stockholders. SLP acquired 70% of the member equity interests of the Company’s 2018-1 portfolio (“2018-1”). The Company retained 30% of the 2018-1 membership interests as a non-controlling equity interest. CONFERENCE CALL INFORMATION A conference call to discuss the Company’s financial results will be held live at 8:30 a.m. Eastern Time on August 9, 2023. Please visit BCSF’s webcast link located on the Events & Presentations page of the Investor Resources section of BCSF’s website at http://www.baincapitalspecialtyfinance.com for a slide presentation that complements the Earnings Conference Call. Participants are also invited to access the conference call by dialing one of the following numbers: Domestic: 1-888-886-7786 International: 1-416-764-8658 Conference ID: 50402553 All participants will need to reference “Bain Capital Specialty Finance - Second Quarter Ended June 30, 2023 Earnings Conference Call” once connected with the operator. All participants are asked to dial in 10-15 minutes prior to the call. Replay Information: An archived replay will be available approximately three hours after the conference call concludes through August 16, 2023 via a webcast link located on the Investor Resources section of BCSF’s website, and via the dial-in numbers listed below: Domestic: 1-844-512-2921 International: 1-412-317-6671 Conference ID: 50402553 Bain Capital Specialty Finance, Inc. Consolidated Statements of Assets and Liabilities (in thousands, except share and per share data) As of As of 30-Jun-23 31-Dec-22 (Unaudited) Assets Investments at fair value: Non-controlled/non-affiliate investments (amortized cost of $1,745,841 and $1,846,172, respectively) $ 1,669,079 $ 1,774,947 Non-controlled/affiliate investment (amortized cost of $149,376 and $133,808, respectively) 191,995 173,400 Controlled affiliate investment (amortized cost of $520,410 and $439,958, respectively) 524,198 438,630 Cash and cash equivalents 87,727 30,205 Foreign cash (cost of $5,203 and $34,528, respectively) 4,612 29,575 Restricted cash and cash equivalents 36,243 65,950 Collateral on forward currency exchange contracts 7,545 9,612 Deferred financing costs 3,276 3,742 Interest receivable on investments 40,342 34,270 Receivable for sales and paydowns of investments 95,893 18,166 Prepaid Insurance 605 194 Unrealized appreciation on forward currency exchange contracts 55 62 Dividend receivable 13,818 13,681 Total Assets $ 2,675,388 $ 2,592,434 Liabilities Debt (net of unamortized debt issuance costs of $8,893 and $10,197, respectively) $ 1,489,607 $ 1,385,303 Interest payable 15,897 12,130 Payable for investments purchased 233 34,292 Base management fee payable 9,116 8,906 Incentive fee payable 4,008 9,216 Unrealized depreciation on forward currency exchange contracts 1,308 — Accounts payable and accrued expenses 4,906 2,954 Distributions payable 24,534 23,242 Total Liabilities 1,549,609 1,476,043 Commitments and Contingencies (See Note 10) Net Assets Common stock, par value $0.001 per share, 100,000,000,000 and 100,000,000,000 shares authorized, 64,562,265 and 64,562,265 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively 65 65 Paid in capital in excess of par value 1,168,384 1,168,384 Total distributable loss (42,670) (52,058) Total Net Assets 1,125,779 1,116,391 Total Liabilities and Total Net Assets $ 2,675,388 $ 2,592,434 Net asset value per share $ 17.44 $ 17.29 See Notes to Consolidated Financial Statements Bain Capital Specialty Finance, Inc. Consolidated Statements of Operations (in thousands, except share and per share data) (Unaudited) For the Three Months Ended June 30 For the Three Months Ended June 30 2023 2022 Income Investment income from non-controlled/non-affiliate investments: Interest from investments $ 47,101 $ 29,769 Dividend income 61 — PIK income 6,249 2,375 Other income 1,922 7,690 Total investment income from non-controlled/non-affiliate investments 55,333 39,834 Investment income from non-controlled/affiliate investments: Interest from investments 2,525 1,901 Dividend income 1,630 1,851 PIK income 628 45 Total investment income from non-controlled/affiliate investments 4,783 3,797 Investment income from controlled affiliate investments: Interest from investments 8,562 4,214 Dividend income 7,037 4,519 Total investment income from controlled affiliate investments 15,599 8,733 Total investment income 75,715 52,364 Expenses Interest and debt financing expenses 20,459 11,027 Base management fee 9,116 8,451 Incentive fee 4,008 4,069 Professional fees 451 446 Directors fees 179 179 Other general and administrative expenses 1,493 1,477 Total expenses, net of fee waivers 35,706 25,649 Net investment income before taxes 40,009 26,715 Income tax expense, including excise tax 1,097 — Net investment income 38,912 26,715 Net realized and unrealized gains (losses) Net realized loss on non-controlled/non-affiliate investments (229) (2,576) Net realized gain (loss) on foreign currency transactions (321) 3,166 Net realized gain (loss) on forward currency exchange contracts — 2,018 Net change in unrealized appreciation on foreign currency translation 127 (2,051) Net change in unrealized appreciation on forward currency exchange contracts (1,476) 8,124 Net change in unrealized appreciation on non-controlled/non-affiliate investments (6,925) (27,206) Net change in unrealized appreciation on non-controlled/affiliate investments (432) 9,102 Net change in unrealized appreciation on controlled affiliate investments (485) (63) Total net gains (losses) (9,741) (9,486) Net increase in net assets resulting from operations $ 29,171 $ 17,229 Basic and diluted net investment income per common share $ 0.60 $ 0.41 Basic and diluted increase in net assets resulting from operations per common share $ 0.45 $ 0.27 Basic and diluted weighted average common shares outstanding 64,562,265 64,562,265 About Bain Capital Specialty Finance, Inc. Bain Capital Specialty Finance, Inc. is an externally managed specialty finance company focused on lending to middle market companies. BCSF is managed by BCSF Advisors, LP, an SEC-registered investment adviser and a subsidiary of Bain Capital Credit, LP. Since commencing investment operations on October 13, 2016, and through June 30, 2023, BCSF has invested approximately $6.8 billion in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments. BCSF’s investment objective is to generate current income and, to a lesser extent, capital appreciation through direct originations of secured debt, including first lien, first lien/last out, unitranche and second lien debt, investments in strategic joint ventures, equity investments and, to a lesser extent, corporate bonds. BCSF has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. Forward-Looking Statements This letter may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this letter may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the U.S. Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this letter. View source version on businesswire.com: https://www.businesswire.com/news/home/20230808429984/en/
Investor Contact: Katherine Schneider Tel. (212) 803-9613 investors@baincapitalbdc.com Media Contact: Charlyn Lusk Tel. (646) 502-3549 clusk@stantonprm.com
