Bain Capital Specialty Finance, Inc. Q3 FY2024 earnings call

Overview of Results - Q3 net investment income per share was $0.53, earnings per share $0.51, net asset value per share $17.76. - Board declared fourth quarter dividend of $0.42 per share and additional $0.03 per share, total $0.45 per share. ### Market Environment - Active deal flow in third quarter with increased transaction levels, driven by M&A and new LBO activity. - Private credit group has presence in middle market, gross originations up 278% YOY. ### Investment Activity - New fundings $413 million into 83 portfolio companies, 97% in first lien structures. - Added 16 new companies, improving single name diversification to 159 companies. ### Portfolio Credit Quality - Portfolio companies exhibited strong fundamental performance, leverage at 4.8 times, interest coverage solid, non-accrual investments low. ### Financials - Total investment income $72.5 million, net investment income $34 million, NAV grew with strong NII overearning dividend.

In the third quarter ended September 30, 2024, net investment income per share was $0.53. Q3 earnings per share were $0.51. Net asset value per share was $17.76, an increase of 0.3% from the prior quarter end. Gross originations during Q3 were $413 million, up 278% year-over-year. New fundings during the quarter were $413 million into 83 portfolio companies. Sales and repayment activity totaled approximately $248 million, resulting in net investment funding of $165 million. The portfolio at fair value was approximately $2.4 billion across 159 companies.

Dividend - Board declared fourth quarter dividend of $0.42 per share and additional $0.03 per share, total $0.45 per share. ### Positioning - Well positioned to source new middle-market lending opportunities with dry powder, global footprint, and deep industry expertise while remaining disciplined in credit selection.

Risks - Forward-looking statements subject to risks and uncertainties in Form 10-Q. - Credit quality idiosyncratic issues with some companies on watch list, small percentage of portfolio underperforming.

Q: Paul Johnson with KBW asked about the interplay of yield decline in the portfolio, including the driver of the 100 basis points quarter-over-quarter decline, spread impression, and pipeline spreads.

A: Michael Ewald responded that ~38 basis points was due to lower base rates, ~10 basis points due to spread on credit assets, and major driver was dividend income decrease. Also discussed spread bifurcation by credit quality and pipeline spreads remaining similar.

Q: Derek Hewett of Bank of America asked about plans to address $300 million of bonds maturing in early 2026.

A: Amit Joshi replied they are prudently talking to banking partners, intend to access the market in 2025, and will manage liabilities between revolving facility and unsecured bonds.