Bain Capital Specialty Finance, Inc. Announces December 31, 2023 Financial Results and Declares First Quarter 2024 Dividend of $0.42 per Share and Additional Dividends Totaling $0.12 per Share for 2024
“BCSF reported strong quarterly and full year 2023 results as we benefited from attractive levels of interest income, net asset value growth and continued stable credit performance across our primarily senior secured portfolio,” said
QUARTERLY HIGHLIGHTS
-
Net investment income (NII) per share was
$0.54 , equating to an annualized NII yield on book value of 12.3%(1); -
Net income per share was
$0.48 , equating to an annualized return on book value of 10.9%(1); -
Net asset value per share as of
December 31, 2023 was$17.60 , as compared to$17.54 as ofSeptember 30, 2023 ; -
Gross and net investment fundings were
$206.4 million and$(101.8) million , respectively; Ending net debt-to-equity was 1.02x, as compared to 1.12x as ofSeptember 30, 2023 (2); -
Investments on non-accrual remained low at 1.9% and 1.2% of the total investment portfolio at amortized cost and fair value, respectively, as of
December 31, 2023 ; -
Subsequent to quarter-end, the Company’s Board of Directors declared a dividend of
$0.42 per share for the first quarter of 2024 payable to stockholders of record as ofMarch 28, 2024 and has also declared additional dividends totaling$0.12 per share for 2024, to be distributed in four consecutive quarterly payments of$0.03 per share per quarter. The first additional dividend is payable to stockholders of record as ofMarch 28, 2024 (3); and -
In
February 2024 ,Kroll Bond Rating Agency, LLC (KBRA) affirmed the Company’s investment grade rating of BBB and stable outlook.
SELECTED FINANCIAL HIGHLIGHTS
($ in millions, unless otherwise noted) |
Q4 2023 |
Q3 2023 |
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Net investment income per share |
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Net investment income |
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Earnings per share |
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Dividends per share declared and payable |
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($ in millions, unless otherwise noted) |
As of
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As of
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Total fair value of investments |
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Total assets |
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Total net assets |
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Net asset value per share |
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PORTFOLIO AND INVESTMENT ACTIVITY
For the three months ended
Investment Activity for the Quarter Ended
($ in millions) |
Q4 2023 |
Q3 2023 |
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Investment Fundings |
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Sales and Repayments |
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Net Investment Activity |
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As of
Investment Portfolio at Fair Value as of
Investment Type |
$ in Millions |
% of Total |
||
First Lien Senior Secured Loans |
|
63.8% |
||
Second Lien Senior Secured Loans |
68.4 |
3.0 |
||
Subordinated Debt |
45.9 |
2.0 |
||
Structured Products |
22.6 |
1.0 |
||
Preferred Equity |
104.4 |
4.5 |
||
Equity Interests |
221.4 |
9.6 |
||
Warrants |
0.5 |
0.0 |
||
Investment Vehicles |
370.7 |
16.1 |
||
Subordinated Note in ISLP |
190.7 |
8.3 |
||
Equity Interest in ISLP |
66.2 |
2.9 |
||
Subordinated Note in SLP |
116.0 |
5.0 |
||
Preferred and Equity Interest in SLP |
(2.2) |
(0.1) |
||
Total |
|
100.0% |
As of
As of
As of
As of
RESULTS OF OPERATIONS
For the three months ended
Total expenses (before taxes) for the three months ended
Net investment income for the three months ended
During the three months ended
Net increase in net assets resulting from operations for the three months ended
CAPITAL AND LIQUIDITY
As of
For the three months ended
As of
As of
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 first quarter dividend is payable on
April 30, 2024 to stockholders of record as ofMarch 28, 2024 . - 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
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: 46709784
All participants will need to reference “Bain Capital Specialty Finance - Fourth Quarter and Fiscal Year Ended
Replay Information:
An archived replay will be available approximately three hours after the conference call concludes through
- Domestic: 1-844-512-2921
- International: 1-412-317-6671
- Conference ID: 46709784
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Consolidated Statements of Assets and Liabilities |
||||||
(in thousands, except share and per share data) |
||||||
As of |
As of |
|||||
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Assets |
|
|
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Investments at fair value: |
|
|
||||
Non-controlled/non-affiliate investments (amortized cost of |
$ |
1,593,360 |
$ |
1,774,947 |
||
Non-controlled/affiliate investment (amortized cost of |
147,971 |
173,400 |
||||
Controlled affiliate investment (amortized cost of |
557,012 |
438,630 |
||||
Cash and cash equivalents |
42,995 |
30,205 |
||||
Foreign cash (cost of |
6,405 |
29,575 |
||||
Restricted cash and cash equivalents |
63,084 |
65,950 |
||||
Collateral on forward currency exchange contracts |
7,613 |
9,612 |
||||
Deferred financing costs |
2,802 |
3,742 |
||||
Interest receivable on investments |
37,169 |
34,270 |
||||
Receivable for sales and paydowns of investments |
4,310 |
18,166 |
||||
|
210 |
194 |
||||
Unrealized appreciation on forward currency exchange contracts |
— |
62 |
||||
Dividend receivable |
9,417 |
13,681 |
||||
Total Assets |
$ |
2,472,348 |
$ |
2,592,434 |
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Liabilities |
|
|
||||
Debt (net of unamortized debt issuance costs of |
$ |
1,255,933 |
$ |
1,385,303 |
||
Interest payable |
13,283 |
12,130 |
||||
Payable for investments purchased |
11,453 |
34,292 |
||||
Unrealized depreciation on forward currency exchange contracts |
2,260 |
— |
||||
Base management fee payable |
8,929 |
8,906 |
||||
Incentive fee payable |
7,327 |
9,216 |
||||
Accounts payable and accrued expenses |
9,581 |
2,954 |
||||
Distributions payable |
|
27,116 |
|
23,242 |
||
Total Liabilities |
1,335,882 |
1,476,043 |
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Commitments and Contingencies (See Note 10) |
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Net Assets |
|
|
||||
Common stock, par value |
65 |
65 |
||||
Paid in capital in excess of par value |
1,168,384 |
1,168,384 |
||||
Total distributable loss |
(31,983) |
(52,058) |
||||
Total Net Assets |
1,136,466 |
1,116,391 |
||||
Total Liabilities and Total Net Assets |
$ |
2,472,348 |
$ |
2,592,434 |
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Net asset value per share |
$ |
17.60 |
$ |
17.29 |
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See Notes to Consolidated Financial Statements |
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Consolidated Statements of Operations |
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(in thousands, except share and per share data) |
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For the Year Ended |
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2023 |
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2022 |
|
2021 |
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Income | |||||||||
Investment income from non-controlled/non-affiliate investments: | |||||||||
Interest from investments | $ |
184,921 |
$ |
138,984 |
$ |
153,703 |
|||
Dividend income |
62 |
634 |
514 |
||||||
PIK income |
20,536 |
13,495 |
4,475 |
||||||
Other income |
10,561 |
15,091 |
6,173 |
||||||
Total investment income from non-controlled/non-affiliate investments |
216,080 |
168,204 |
164,865 |
||||||
Investment income from non-controlled/affiliate investments: | |||||||||
Interest from investments |
9,890 |
7,470 |
1,818 |
||||||
Dividend income |
4,815 |
4,109 |
— |
||||||
PIK income |
2,308 |
1,542 |
5,622 |
||||||
Total investment income from non-controlled/affiliate investments |
17,013 |
13,121 |
7,440 |
||||||
Investment income from controlled affiliate investments: | |||||||||
Interest from investments |
33,739 |
19,819 |
11,822 |
||||||
Dividend income |
30,957 |
18,401 |
12,601 |
||||||
PIK income |
— |
— |
666 |
||||||
Total investment income from controlled affiliate investments |
64,696 |
38,220 |
25,089 |
||||||
Total investment income |
297,789 |
219,545 |
197,394 |
||||||
Expenses | |||||||||
Interest and debt financing expenses |
80,008 |
52,318 |
51,345 |
||||||
Base management fee |
36,095 |
34,669 |
34,888 |
||||||
Incentive fee |
25,456 |
19,572 |
24,028 |
||||||
Professional fees |
2,561 |
2,959 |
2,854 |
||||||
Directors fees |
716 |
707 |
725 |
||||||
Other general and administrative expenses |
7,981 |
5,777 |
5,038 |
||||||
Total expenses before fee waivers |
152,817 |
116,002 |
118,878 |
||||||
Base management fee waiver |
— |
— |
(4,837) |
||||||
Incentive fee waiver |
— |
— |
(4,519) |
||||||
Total expenses, net of fee waivers |
152,817 |
116,002 |
109,522 |
||||||
Net investment income before taxes |
144,972 |
103,543 |
87,872 |
||||||
Income tax expense, including excise tax |
3,357 |
837 |
134 |
||||||
Net investment income |
141,615 |
102,706 |
87,738 |
||||||
Net realized and unrealized gains (losses) | |||||||||
Net realized loss on non-controlled/non-affiliate investments |
(62,903) |
(1,725) |
25,084 |
||||||
Net realized gain (loss) on non-controlled/affiliate investments (net of taxes of |
19,006 |
(1,355) |
— |
||||||
Net realized loss on controlled affiliate investments |
— |
— |
(3,858) |
||||||
Net realized gain (loss) on foreign currency transactions |
(5,134) |
5,292 |
(3,496) |
||||||
Net realized gain (loss) on forward currency exchange contracts |
(407) |
20,894 |
(23,773) |
||||||
Net realized loss on extinguishment of debt |
— |
(747) |
(4,859) |
||||||
Net change in unrealized appreciation on foreign currency translation |
4,050 |
(3,644) |
(936) |
||||||
Net change in unrealized appreciation on forward currency exchange contracts |
(2,322) |
(5,259) |
27,935 |
||||||
Net change in unrealized appreciation on non-controlled/non-affiliate investments |
49,524 |
(50,309) |
(568) |
||||||
Net change in unrealized appreciation on non-controlled/affiliate investments |
(24,271) |
27,190 |
12,576 |
||||||
Net change in unrealized appreciation on controlled affiliate investments |
4,217 |
12,437 |
3,964 |
||||||
Total net gains (losses) |
(18,240) |
2,774 |
32,069 |
||||||
Net increase in net assets resulting from operations | $ |
123,375 |
$ |
105,480 |
$ |
119,807 |
|||
Basic and diluted net investment income per common share | $ |
2.19 |
$ |
1.59 |
$ |
1.36 |
|||
Basic and diluted increase in net assets resulting from operations per common share | $ |
1.91 |
$ |
1.63 |
$ |
1.86 |
|||
Basic and diluted weighted average common shares outstanding |
64,562,265 |
64,562,265 |
64,562,265 |
About
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
View source version on businesswire.com: https://www.businesswire.com/news/home/20240227254296/en/
Investors:
(212) 803-9613
investors@baincapitalbdc.com
Media:
(646) 502-3549
clusk@stantonprm.com
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