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Bain Capital Specialty Finance, Inc. Announces June 30, 2022 Financial Results and Declares Third Quarter 2022 Dividend of $0.34 per ShareBain Capital Specialty Finance, Inc. (NYSE: BCSF, the "Company", "our" or "we") today announced financial results for the second quarter ended June 30, 2022, and that its Board of Directors has declared a dividend of $0.34 per share for the third quarter of 2022. "We remain focused on executing our strategy of investing in senior secured loans to high-quality middle-market companies, which generated higher net investment income for our shareholders this quarter," said Michael Ewald, Chief Executive Officer of BCSF. "We believe the Company is well positioned to continue to deliver attractive earnings and shareholder value over the long-term driven by our diversified portfolio of senior secured, floating rate loans and the strength of our capital structure." QUARTERLY HIGHLIGHTS
SELECTED FINANCIAL HIGHLIGHTS
PORTFOLIO AND INVESTMENT ACTIVITY For the three months ended June 30, 2022, the Company invested $481.9 million in 50 portfolio companies, including $253.7 million in 11 new companies, $216.8 million in 38 existing companies and $11.4 million in International Senior Loan Program, LLC ("ISLP"). The Company had $332.4 million of principal repayments and sales in the quarter, resulting in net investment fundings of $149.5 million. For the three months ended June 30, 2022, ISLP invested $74.5 million in six portfolio companies. ISLP had $27.7 million of principal repayments and sales in the quarter. On a net basis, ISLP's investments in the quarter totaled $46.8 million. For the three months ended June 30, 2022, SLP invested $82.3 million in 12 portfolio companies. SLP had $17.6 million of principal repayments and sales in the quarter. On a net basis, SLP's investments in the quarter totaled $64.7 million. Investment Activity for the Quarter Ended June 30, 2022:
As of June 30, 2022, the Company's investment portfolio had a fair value of $2,287.0 million, comprised of investments in 122 portfolio companies operating across 31 different industries. Investment Portfolio at Fair Value as of June 30, 2022:
As of June 30, 2022, the weighted average yield on the investment portfolio at amortized cost and fair value were 8.5% and 8.8%, respectively, as compared to 7.9% and 8.1%, respectively, as of March 31, 2022.(2) 94.8% of the Company's debt investments at fair value were in floating rate securities. As of June 30, 2022, one portfolio company was on non-accrual status, representing 2.2% and 1.4% of the total investment portfolio at amortized cost and fair value, respectively. As of June 30, 2022, ISLP's investment portfolio had an aggregate fair value of $541.3 million, comprised of investments in 31 portfolio companies operating across 14 different industries. The investment portfolio on a fair value basis was comprised of 96.4% first lien senior secured loans and 3.6% second lien senior secured loans. 100% of ISLP's debt investments at fair value were in floating rate securities. As of June 30, 2022, SLP's investment portfolio had an aggregate fair value of $433.1 million, comprised of investments in 45 portfolio companies operating across 20 different industries.(3) The investment portfolio on a fair value basis was comprised of 95.0% first lien senior secured loans and 5.0% second lien senior secured loans. 100% of SLP's debt investments at fair value were in floating rate securities. RESULTS OF OPERATIONS For the three months ended June 30, 2022 and March 31, 2022, total investment income was $52.4 million and $46.0 million, respectively. The increase in investment income was primarily due to an increase in other income and dividend income. Total expenses (before taxes) for the three months ended June 30, 2022 and March 31, 2022 were $25.6 million and $24.3 million, respectively. The increase was primarily driven by an increase in incentive fees and interest and debt financing expenses. Net investment income for the three months ended June 30, 2022 and March 31, 2022 was $26.7 million or $0.41 per share and $21.7 million or $0.34 per share, respectively. During the three months ended June 30, 2022, the Company had net realized and unrealized gains (losses) of $(9.5) million. Net increase in net assets resulting from operations for the three months ended June 30, 2022 was $17.2 million, or $0.27 per share. CAPITAL AND LIQUIDITY As of June 30, 2022, the Company had total principal debt outstanding of $1,256.7 million, including $191.7 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, $112.5 million outstanding in the Company's senior unsecured notes due 2023, $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, 2022, the weighted average interest rate on debt outstanding was 3.2%, as compared to 2.9% for the three months ended March 31, 2022. As of June 30, 2022, the Company had cash and cash equivalents (including foreign cash) of $43.0 million, $108.3 million of capacity under its Sumitomo Credit Facility and $50.0 million of capacity under the Revolving Advisor Loan. As of June 30, 2022, the Company had $283.3 million of undrawn investment commitments. As of June 30, 2022, the Company's debt-to-equity and debt-to-equity (net of cash) ratios were 1.14x and 1.07x, respectively, as compared to 0.99x and 0.89x, respectively, as of March 31, 2022. Subsequent to quarter-end, the Company increased its total commitments to the Sumitomo Credit Facility from $300.0 million to $485.0 million. Endnotes
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 4, 2022. Please visit BCSF's webcast link located on the Events & Presentations page of the Investor Resources section of BCSF's website at http://www.baincapitalbdc.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:
All participants will need to reference "Bain Capital Specialty Finance - Second Quarter Ended June 30, 2022 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 11, 2022 via a webcast link located on the Investor Resources section of BCSF's website, and via the dial-in numbers listed below:
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, 2022, BCSF has invested approximately $5.8 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.
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