Bain Capital Specialty Finance, Inc. Announces September 30, 2024 Financial Results and Declares Fourth Quarter 2024 Dividend of $0.42 per Share

BOSTON--(BUSINESS WIRE)--November 05, 2024-- 

Bain Capital Specialty Finance, Inc. (NYSE: BCSF, the "Company", "our" or "we") today announced financial results for the third quarter ended September 30, 2024, and that its Board of Directors (the "Board") has declared a dividend of $0.42 per share for the fourth quarter of 2024 and an additional dividend of $0.03 per share that was previously announced.

"BCSF delivered another strong quarter of earnings driven by high net investment income, net asset value growth, and continued healthy credit performance," said Michael Ewald, Chief Executive Officer of BCSF. "We also had an active quarter of new origination activity supported by our dedicated Private Credit Group's global and longstanding presence in the core middle market. Looking forward, we believe the Company remains well-positioned to capitalize on attractive investment opportunities."

QUARTERLY HIGHLIGHTS

   -- Net investment income (NII) per share was $0.53, equating to an 
      annualized NII yield on book value of 11.9%(1); 
 
   -- Net income per share was $0.51, equating to an annualized return on book 
      value of 11.5%(1); 
 
   -- Net asset value per share as of September 30, 2024 was $17.76, as 
      compared to $17.70 as of June 30, 2024; 
 
   -- Gross and net investment fundings were $413.1 million and $165.1 million, 
      respectively; ending net debt-to-equity was 1.09x, as compared to 0.95x 
      as of June 30, 2024(2); 
 
   -- Investments on non-accrual represented 1.9% and 1.1% of the total 
      investment portfolio at amortized cost and fair value, respectively, as 
      of September 30, 2024; and 
 
   -- Subsequent to quarter-end, the Company's Board of Directors declared a 
      dividend of $0.42 per share for the fourth quarter of 2024 payable to 
      stockholders of record as of December 31, 2024. The Board of Directors 
      previously announced an additional dividend of $0.03 per share payable to 
      stockholders of record as of December 31, 2024.(3) 

SELECTED FINANCIAL HIGHLIGHTS

 
 ($ in millions, unless otherwise noted)      Q3 2024    Q2 2024 
------------------------------------------  ---------  --------- 
 Net investment income per share            $    0.53  $    0.51 
 Net investment income                      $    34.0  $    33.1 
 Earnings per share                         $    0.51  $    0.45 
 Dividends per share declared and payable   $    0.45  $    0.45 
 
 
 ($ in millions, unless otherwise                  As of             As of 
 noted)                               September 30, 2024     June 30, 2024 
---------------------------------  ---------------------  ---------------- 
 Total fair value of investments   $             2,408.0  $        2,237.5 
 Total assets                      $             2,543.7  $        2,414.8 
 Total net assets                  $             1,146.6  $        1,142.5 
 Net asset value per share         $               17.76  $          17.70 
 

PORTFOLIO AND INVESTMENT ACTIVITY

For the three months ended September 30, 2024, the Company invested $413.1 million in 83 portfolio companies, including $330.9 million in 16 new companies and $82.2 million in 67 existing companies. The Company had $248.0 million of principal repayments and sales in the quarter, resulting in net investment fundings of $165.1 million.

Investment Activity for the Quarter Ended September 30, 2024:

 
 ($ in millions)             Q3 2024  Q2 2024 
-------------------------  ---------  ------- 
 Investment Fundings       $   413.1  $ 306.7 
 Sales and Repayments      $   248.0  $ 473.7 
-------------------------      -----   ------ 
 Net Investment Activity   $   165.1  $(167.0) 
 

As of September 30, 2024, the Company's investment portfolio had a fair value of $2,408.0 million, comprised of investments in 159 portfolio companies operating across 31 different industries.

Investment Portfolio at Fair Value as of September 30, 2024:

 
 Investment Type                            $ in Millions   % of Total 
----------------------------------------  ---------------   ---------- 
    First Lien Senior Secured Loan        $       1,521.5         63.2% 
    Second Lien Senior Secured Loan                  55.3          2.3 
    Subordinated Debt                                47.0          2.0 
    Preferred Equity                                171.3          7.1 
    Equity Interest                                 220.2          9.1 
    Warrants                                          0.8          0.0 
    Investment Vehicles                             391.9         16.3 
       Subordinated Note in ISLP                    190.7          7.9 
       Equity Interest in ISLP                       56.5          2.3 
       Subordinated Note in SLP                     146.5          6.2 
       Preferred and Equity Interest in 
        SLP                                          (1.8)        (0.1) 
----------------------------------------      -----------   ---------- 
 Total                                    $       2,408.0        100.0% 
 

As of September 30, 2024, the weighted average yield on the investment portfolio at amortized cost and fair value were 12.1% and 12.1%, respectively, as compared to 13.1% and 13.2%, respectively, as of June 30, 2024(4) . 90.8% of the Company's debt investments at fair value were in floating rate securities.

As of September 30, 2024, five portfolio companies were on non-accrual status, representing 1.9% and 1.1% of the total investment portfolio at amortized cost and fair value, respectively.

As of September 30, 2024, ISLP's investment portfolio had an aggregate fair value of $691.7 million, comprised of investments in 37 portfolio companies operating across 15 different industries. The investment portfolio on a fair value basis was comprised of 95.1% first lien senior secured loans, 0.7% second lien senior secured loans and 4.2% equity interests. 100% of ISLP's debt investments at fair value were in floating rate securities.

As of September 30, 2024, SLP's investment portfolio had an aggregate fair value of $1,132.9 million, comprised of investments in 85 portfolio companies operating across 26 different industries. The investment portfolio on a fair value basis was comprised of 98.4% first lien senior secured loans, 1.4% second lien senior secured loans and 0.2% equity interests. 99.9% of SLP's debt investments at fair value were in floating rate securities.

RESULTS OF OPERATIONS

For the three months ended September 30, 2024 and June 30, 2024, total investment income was $72.5 million and $72.3 million, respectively.

Total expenses (before taxes) for the three months ended September 30, 2024 and June 30, 2024 were $37.5 million and $38.0 million, respectively.

Net investment income for the three months ended September 30, 2024 and June 30, 2024 was $34.0 million or $0.53 per share and $33.1 million or $0.51 per share, respectively.

During the three months ended September 30, 2024, the Company had net realized and unrealized losses of $0.9 million.

Net increase in net assets resulting from operations for the three months ended September 30, 2024 was $33.1 million, or $0.51 per share.

CAPITAL AND LIQUIDITY

As of September 30, 2024, the Company had total principal debt outstanding of $1,306.2 million, including $353.7 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 $300.00 million outstanding in the Company's senior unsecured notes due October 2026.

For the three months ended September 30, 2024, the weighted average interest rate on debt outstanding was 5.1%, as compared to 5.1% for the three months ended June 30, 2024.

As of September 30, 2024, the Company had cash and cash equivalents (including foreign cash) of $30.5 million, restricted cash and cash equivalents of $29.3 million, $0.6 million of unsettled trades, net of receivables and payables of investments, and $501.3 million of capacity under its Sumitomo Credit Facility. As of September 30, 2024, the Company had $432.2 million of undrawn investment commitments.

As of September 30, 2024, the Company's debt-to-equity and net debt-to-equity ratios were 1.14x and 1.09x, respectively, as compared to 1.03x and 0.95x, respectively, as of June 30, 2024(2) .

Endnotes

 
(1)    Net investment income yields and net income returns are calculated on 
       average net assets, or book value, for the respective periods shown. 
 
(2)    Net debt-to-equity represents principal debt outstanding less cash and 
       cash equivalents and unsettled trades, net of receivables and payables 
       of investments. 
 
(3)    The fourth quarter dividend is payable on January 31, 2025 to 
       stockholders of record as of December 31, 2024. 
 
(4)    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. 
 

CONFERENCE CALL INFORMATION

A conference call to discuss the Company's financial results will be held live at 9:30 a.m. Eastern Time on November 6, 2024. 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.

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