GBDC - Earnings call transcript Q3 2018

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Operator

Welcome to the Golub BDC, Inc. June 30, 2018 Quarterly Earnings Conference Call.

Before we begin, I would like to take a moment to remind our listeners that remarks made during this call may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than the statements of historical facts made during this call 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 the Golub Capital BDC, Inc.’s filings with the Securities and Exchange Commission.

the that conference intends Investor to call, on homepage presentation on refer Resources find slide click the earnings www.golubcapitalbdc.com, XXXX today’s please of the a June the Events/Presentations Investor to Company to tab on XX, For the website, Presentation. link Company’s visit the in BDC’s section. Resources earnings be Golub Investor may Capital found on the also release the Company’s website

over to ahead, to BDC. for reminder, David replay being purposes. turn this the now would Please a Executive call As Chief recorded like Mr. Capital Golub, Officer sir. call I Golub is of go

David Golub

Thank release you. Chief am Financial for the XX, June for issued Director. posted us our joined Gregory and today. we Robbins, Managing quarter earnings website. ended Hi, I our everybody, we presentation thanks on Officer; Yesterday and Teune, press by an earnings Ross afternoon, joining our

presentation refer for ended another XXth to was to going We’re the that quarter The call June quarter today. strong throughout GBDC.

for who GBDC, to by healthy, focus private market Ross are lien partnership-oriented the loans an on secured For to start end some third to those I’m that come at detail. to are senior GBDC’s back in sponsors. companies will new closing quarter. the And providing been, equity strategy of for our is, resilient since going overview has to strong you first inception and more backed investment of middle fiscal then results results take today remarks. through with the you I’m going

or or quarter share share, compares March dive the from $XX.X for net quarter operations per assets the ended or that increase million income Net million the for $X.XX in $XX Let’s ;that or ended net it, was million for to to per credit into quarter details. as share the compares income, was share $XX.X March or quarter income investment XX. $XX.X before $X.XX or million a call a Net $X.XX XXst. for the losses, $X.XX I

$XX.X income the $XX.X was provided investment to per $X.XX as we prior accrual, quarterly Consistent per currency gains net to That’s quarters, investment for $XX.XX. net million the year. prior million $XX.XX quarter. per million share share $X.XX incentive excess Due for of for and income realized NII the $X.X think GBDC. gains more new unrealized accrual a fee, or compares compared capital and that million measure. $XXX,XXX earnings ended from gains previous to million share high or XXth, the and on for unrealized capital of with rose share Excluding foreign or net Net or incentive $XX.X of asset $X.XX June per fee million result net value gains record $XX.X was a This on investments of share our was measure for investments realized in to $X.XX gains excluding is $X realized this net meaningful unrealized net distribution, and depreciation. of per because share and quarter a adjusted the we’ve the

increased one quarter investments XX% loans, for or $X.X portfolio that the XX% commitments million $XXX.X commitments -- including secured stop new X% investment investments in the by investments of sorry, investment and companies million. total middle subordinated were were X.X% New were of $XXX.X in $XX.X Loan approximately market debt. SLF, I��m in at the investments investments, total for investments about loans, Of quarter totaled senior equity SLF, new Senior were X% Overall, in value Fund and million million. included were fair

of $XX.XX. perspective asset a share and incentive for investment see can fee, share we you net earned net four, the can gains table $X.XX income to before we share per that Turning income see perspective, the our in $X.XX earned the net you from accruals slide from capital value per per

investment. provide of more As some remains different to in of highlights I’m well-diversified over to discuss additional companies, million slide, portfolio investments average the detail. on a with Ross per and results the to floor portfolio the size that, shown and financial $X.X the an XXX bottom portfolio With very in going the turn bit

Ross Teune

Thanks, David.

to highlights total $XX.X growth quarter. and and Turning to originations million $XXX of total of slide during $XXX.X slide exits net five. This the funds sales contributing of investments of our million, million

stop by loans to type Turning shows slide quarter-over-quarter with mix six. consistent represent XX%. overall portfolio largest remained category our investment at continuing slide our This to has one

seven. the of $X.X Turning The remains size an investment slide illustrates that to slide average million. portfolio well-diversified with

invested predominantly significant portfolio there been the and remained past over percentages have loans the Our industry debt in classification floating no rate investment in changes year.

on eight. Turning X.X% new X.X% down quarter. this average investments from weighted slide was it The the of in rate previous quarter, to

we on high rate call the weighted relative anomaly. was paid the quarter off, an on new spreads, with existing last increased As noted a in rate average increase weighted larger investments few average to quarter, on payoffs X.X%. the last investments loans the and that to Due

a As time the rate on rate of contractual the is investments interest the new funding. based average weighted reminder, at on

would quarter. right For using floor. graph rate summarizes and to on graph new spread be for side. LIBOR, any variable the portfolio impact the loans, LIBOR, hand Shifting the over the LIBOR investment the spreads the calculated current of contractual rate This

bear X.X%. green the rates that increase the which the rate on of income on earned includes and the LIBOR in line by discounts increases LIBOR and over are for amount represents in is LIBOR our of at as origination income increased debt, line. X.X%, XXth, at have including quarter the Due rate as contracts weighted investment the investments, income on for increased fees. of quarters, yield line, of blue the line fees cause the fee reference yield investments investments first determined the vast the yield, resets ended actual variable discounts at June the cost upfront which X.X% a and or reset. amortization is to few interest dark contract past to and the the have majority LIBOR excluding primary average Focusing to but income, This also amortization the interest light the blue and

Moving to at portfolio over or June our quality the strong XX% of which internal XXth highlighted in of on June next X, of slides. as with is performance remained XX. X XXth, Fundamental having the rating credit investments slide two

number During investments increased the XXth, quarter ended June from of the to nonaccrual investments. three one

and XXth, value at June of of fair X.X%, As investments percentage nonaccrual as X.X% total investments a were respectively. and cost

XX. value $X.XX value vehicles, and with of million asset total firms valuation assets total cash independent rate cash investments million, billion. and million restricted total ended the quarter. the reminder, each statement and issued of $X.X share $XX.X a balance billion; debt and per Total our $XXX.X income $XXX credit is XX% securitization our investments was which Total XX Reviewing approximately and on debentures, facility. We quarter includes slides fair million floating-rate fixed revolving of debt million; net at of $XX.XX. sheet through $XXX.X of outstanding value debt our $XXX was in As in

from XXth was operations. income due increases primarily quarter ended our GAAP portfolio. LIBOR targets. statement ratio quarter, equity million to the ratio was below and in times, continued the million, while $XX.X prior regulatory of last term to investment debt are to slightly but times. Our $X.X Total X.XX in the was of These our equity the from X.XX quarter, June growth longer increase up an Flipping debt to for

fee expenses incentive interest side. well expense million, were as the primarily $X.X attributable expenses was expense. LIBOR to million. increase which On rising higher other higher debt as $XX.X of This by financing Total is an and caused

Turning return to the following the the slide. on distributions top past average and on equity over The summary five a quarters. provide quarterly tables our of

Our the five page distributions regular gains our GAAP our return the per investment incentive quarters. averaged accrual income which this X% bottom the remained share excluding The based NAV time. quarterly for increasing quarterly on per with long share net per quarter X.X% net when and has The for of the illustrates at is stable history fee. of over was have annualized income share, $X.XX consistent capital past

and have were special of including For and historical paid December $X.XX share, comparison XX, XXXX December that per distributions on purposes, respectively. we and excluding the XX, NAV both XXXX, $X.XX presented

This had past loan quarters annualized to slide impacted Total senior the target value to a combination two by at investments provides financial assets some in for XXth, at put XX.X% which senior to shortage for of appropriate fund. investment XX. unrealized disappointing in fair investments returns negatively continued total been loan The our and leverage. portfolio by Turning have below quarter. due fund, another million few and slide June prepayment level losses highlights a activity declined of company of to $XXX on high

with Stanley. securitization cash, the unrestricted new governing debt of and credit available we credit a next We terminated. $XXX redemption, had facility, our availability The month for in credit all equal the In SBIC $XXX the X.X% interest securitization revolving July form the availability available our facility slide. bears and following notes issued we our rate as during XXth, to restricted capital to new additional million subsidiaries. of agreements on revolving credit and an plus facility closed with one in connection redeemed Turning were of LIBOR June the the the Morgan XXth, period. On the on debentures through million facility, investment of XXXX over

on XX. Finally, slide

the share, record to payable on Xth. a provide declared XXth $X.XX now Board turn David closing Our September of call back to of per remarks. I’ll quarterly will who some distribution on shareholders September

David Golub

Thanks, Ross.

LIBOR, strong new another taking drivers two were sum market quarter debt higher gains. ending several the capital our on solid our a update share. equity stable with structure. topics, GBDC NAV I’ll and record an to So, at outlook up. quality, close questions credit and this before quarter, Key some quarter per had high

factors late more in wider In the two increased broadly activity, of loan years. Let’s first the and in start the time supply of paper June market than to market new favor July our in early the began syndicated M&A tilt Heightened with in BSL on but market, and back liabilities the lenders in middle targets. outlook. conditions for often higher market market. that BSL to And not the spreads investors push yields meant ROE their to managers in is These immune BSL caused insulated pricing. said I’ve to the securitization needed market hit trends on CLO

to minutes want talking about now So, a we’re the we going and in forward. what spend to market few likely seeing what middle think we’re see I

some BSL in in stabilization, sustain So a that. to I whether market a whether this far, change following too But, we’re in shift in any areas is draw middle see to conclusion seeing early about small it’s and market, spreads. to the derivatively think we’re going significant likely improvements the

this and Capital now in an median calendar was with the on quarter’s may we conditions lender-friendly with XXXX the momentum, our growth. towards calendar that We’ve quarters end U.S. XXXX data and underlie revenue evolves. about the September three sample. think, of growth QX and we’ll BDC of from suggests record Middle positive Report On best call, double-digit last toward I in be a structure. Market our interfere the bill of the the all debt economy in inception QX a seen about market continued permitting XXth has leverage. Calendar see was thinking XXXX From watching market. talked broadly I’ll the our best the perspective, trend our growth capital now showed QX the recent lender-friendly QX. themes the more syndicated late June until trends of EBITDA period three best that higher index; revenue whether of update ended QX; and Golub drive The lot of a year-over-year was for quarter macro the now QX the consecutive since

harm. in today no do and see we Oath: think it. the no First, model We have believe great we rush a to we change Hippocratic

access that incremental risk. environment and we taken that And the cautious. opportunities. costs constraint attractive lightly. which is Second, in we costs we a higher We be be environment more incremental consequently, think third, of constraint we that us. involves of shouldn’t isn’t risks and pays The believe the inevitably is said this we is for to the challenging kind availability leverage And believe it to think and today said investment debt

context mind, structure. our to steps themes provide and existing optimize in also we continue the debt regulatory for to for these These leverage limit our whether capital taken makes With evaluate increasing Board we’ve sense our shareholders. themes

already Fargo CLO expect December we of amended low XXXX our You’ll both recall of from GBDC’s but and securitization. securitization, Stanley facility credit Morgan we relief, On we facility to remain our market a we Wells XXth, the conditions Action new Morgan SEC. replace Stanley. we this XXXX the of in awaiting the In refinanced with capital. refinance relief repriced in July year. cases, We facility No long March such would it have our attractive, XXXX we receive we’re into with CLO If cost reduced with still new that to when preferred as so and a

open items. we for Q&A, two before line Now, the housekeeping

several In I’d design meant like Capital downturn. quarter’s the the wrong, I (NASDAQ:ACAS), Q&A. I Ares managers to correct trouble these and approach I include and investment I to easy misspoke in discussing last to pointed I strategy, structure mentioned First, are and our in last to mistake list American capital got who in instead. get to that but accidentally said made into issues

item, interest and error. get of brought called Bock. was second brings new partner over question the of of trouble “the opportunity example, for from motives and and for BDC shareholders And We math” leverage lot He given Ares. today honoring in had managers knew tough responding always in “the Jonathan have as what examining very analytics research, just a for the into to he contributions I of credit decidedly And for new Which of Jon you downturn. to conference”. “the my us the pursue a are in often were asked They came impact introduced heat equity the a the wanted outside pure. structures, mind. lot scorecard”, I his know, of But, fee best to course spend returns Jon. BDC a to Jon took shareholder of to many last decided of industry, time. And industry minute frequent you losses He to, me level always He questions did his respect and the a the ours. not I that. on they to of effective he apologize many research. recently

I listening, moment of you give questions. want to With one to I thing if the for wanted you could the be give operator, give lines to want Jon, you’re a just missed. please never And say, -- So, honor, your us, will in you that silence. open us that,

Operator

comes ahead, Our Wells go sir. O’Shea Instructions] [Operator Fargo first Finn Securities. the of from with Certainly. question Please line

Finn O’Shea

always like six maybe Thank then credit revolving on very you earnings follow taking for my it’s Can especially an start the toasts that? short motives the July But, facility. thereafter. question. difficult behind question. expand It with to with Jon David, I’ll maturity looks an to and those period, you out months

David Golub

Sure.

SEC as permit some new So, And would been I calls, a now. years on prior that mentioned quite we’ve securitizations actually making we gaining in two letter to progress. issue in discussions over with for GBDC the No-Action are time,

to don’t we to have we continue now. going are it that that optimistic We receive be relief, but No-Action

Wells safe of having the not with from provide But to mark-to-market it. relief. and plan replace favorable, It’s about place facility LIBOR Stanley, plus Fargo So, It’s as priced. plus LIBOR the will we conditions remain XXX. our actually new And with get us a favorably many features did to which that Morgan at well-structured than lower securitization. in market new prudent, that it’s standpoint in too assuming put us XXX, we the No-Action carry to for facility a we designed a additional spread months, facility with is some it’s facility being that to six facility time that’s

Finn O’Shea

structures then, you’re Thank light a That’s on very strong you. able helpful. in pretty a of the And question attain equity to quarter.

notice be that and if of even time. it stuck very tend some move buyouts they’re on with often take successful, these they your a lot with but help for can other can’t So, to BDCs of how names equity,

grants a able bit, and this right move features help presumably little that of you you incorporate coinvest are the arranger equity quickly? to so So, as to control you’re type change often that you

David Golub

step and philosophy Well, coinvestments. so, about in respect let me of go a back equity our talk

calling because in coinvestments. that to Golub originating. GBDC coinvestments loans a that we equity it’s with portfolio these portion equity arise general believe And connection So, allocate for I’m its new in appropriate Capital is of to them

buyout. So, that connection finance amount that sponsor equity a we a we in for to will in the invest the with negotiate ability sponsor transaction. of small new new will with be a to And them help working buyout, alongside

Our of a equity coinvestment be to to much partner the approach equity very sponsor. is

with the to would at exit we is sponsor the seek enter time equity So, equity both the equity the the the sponsor buyout that sponsor the exiting. and transaction at with transaction of the time

coinvestments vary. of timing equity in our the So, does whole positions

short as of couple and years be much that. as sometimes Sometimes, than it’s longer it a can

which in over control period are equity the not We coinvestments. we our hold of

agree equity with equity program coinvestments had time, look sense, very a over coinvestments. at your successful I in If you we

of and those losses contributed report returns the return for it. on rate gains attractive coinvestments our have been to realized ability our has gains quarters quite equity and investments credit Our net equity produce unrealized of and which with in offset to that on we most

I now reported XX think, XX and we’ve net unrealized at the quarters realized last of gains. we’re

that Much exceeded our losses that we’ve program. gains quarters. to the So, coinvestment goes of equity last in for XX XX had the credit of

Finn O’Shea

Very you. And then, well. just question, I one Thank more may. if

largest of draw a kind transaction like this follow-ons I’m a have unfunded It individual course, this that and -- data now name very there, Of split us quarter. follow-ons. a often of versus large a getting lender. you at those, platform give can draws? what even Among looks between just looking commitments, your a you like the quarter the pretty was that given And as -- is general looks new split the incumbent it one,

a in normal know follow-on it’s delayed quarter but kind of can question, long-winded a you I investments? draws your So, versus breakdown of

David Golub

some relate quarters, XX% for of XX% be intended actually, that say range most I’d do in time. portion to from relates back challenging that at quite or quarter-to-quarter. that going to to draws, the to to the to it because new incumbencies harder a varies to look that very related incumbencies, that Of lot percentage proportion because DDTLs it’s originations is It’s revolver the

draws. an in don’t delayed I to identify respect pattern think of So, there’s easy

Operator

with Robert Our next question of James. comes Dodd Raymond go from line the Please ahead.

Robert Dodd

guys. Hi,

supply Just questions. tightened of early ending and different back concerns your were up Kind all, quickly. was spreads we’ve that of saw than your market, on it It’s ‘XX, seen going get very rather of of widening down world the the as addressed to you to of comments, obviously, this, -- time what became think market sharpen, happened right? -- widen we do obviously back narrow rapidly that kind wanted the that a ‘XX the first that just to for economic fears in -- it we terms But, late what’s But it for it going those very, of widening broader couple dynamic, the different there point; apparent little more at of you here saw bit wasn’t catastrophe. -- back is as narrow to but current kind I last very potential to reasons? very

David Golub

couple Robert. So, of reactions,

to as was does ‘XX in This early the like you’re being time, the markets. different. fear-based around it’s is sustained feel part think, of time. I widening we First, that point timing a It less choppiness to that it right last at than saw and it time

it’s lot on of key today’s that the for liabilities of think, a broadly don’t I watch securitization most syndicated pay version a to spreads to, people is variables one attention in metric CLOs.

important. explain why think that’s so I we So,

loan syndicated given to in equity off couple ROE of widening equity of syndicated be there to to CLOs being that those formed. cost to capital over the a in is of investors of And broadly course the of be those about the down. for persuade months. form for of CLO running broadly vehicles. order invest any broadly of some CLO some the are period, able in have The of the is held those and new meaningful market in of -- that that they the in last will managers the spreads And means market, increased in syndicated of of seen managers We’ve are XX% that able vehicles, today be CLOs. So, that form

managers loans on Either loans higher those one pressure a asking back and CLO you explicitly who be down tends out. choice of new because to puts as formation. Their market for that for or pressure a CLO is of The new there upward demand loans. overtly higher on So, on formation market the BSL getting you in by spreads. CLO to have to slowdown Either spreads come middle managers have market push spreads underlying less is slow are follows.

like as off. Sometimes tends a most if and month to as can broadly bit that vacation new generalization, to It’s broadly come The period, on it the month market of sometimes Most syndicated going it’s the tends the can, middle August France. market. follow choose market But market because other is a as it a is of to year. is they get syndicated months. lag lag, what’s be going during the not of there deals a in to BSL August take done times issuers be of the easily challenging to

So, tie be also see well. it BSL arrangers these is a filter new down to sustained, market. the between new market, us, good on be on in bring a right markets. during spreads Labor issue in you’ll And Again, out all might on history, there lag in issue. market where formation. a new sign away. also pressure has is a think would based historically we see ought been is in lenders, at That my turn the two typically as of but of see if There see there spate -- a for typically I higher to middle guess I not you’ll wider right that And period eyes spate think the CLO you’ll after Day, spreads BSL period, the

Robert Dodd

including year. roughly. assets, last X.X%, of the shortage that income color. If obviously look below fees at last incentive the gap Perfect. total kind year, fees on at But, for this and it year there, this leverage under appreciate can, SLF. I management before returns at that bit, -- I on leverage the Obviously being balance I topic a far ROE year, sort on BDC appropriate little target so of was that’s or X, in If the everything target on switching a sheet. of the

returns, are sheet like on-balance more course, X%. of Your

on give the the you your some us can returns there? deserves that program? generates your of thoughts given that what’s sheet lagging it deserves view plan the -- So, the Or whether are SLF strategy -- significantly on-balance SLF capital, on returns your one stop

David Golub

I So, we’re feet speaking our think with that on issue.

a in SLF. in currently respect shrink of mode We’re

We of to think risk one be if are explicitly is seeing origination the than reward our we that stop capital quite would risk that program. dedicated we reward sheet our SLF the growing better same on-balance

I we’re that time. in change suggests team. headed, that following programs our Well, over that to with reward So, tend our and is data risk stop markets were us? where which you logic with the one better, agree does Where take

presence cautious the anyway, mode. it to market think, time we’re make at middle become when make more now, sense use sustain there secured tool and market in in it landscape increase exposure we sense, SLF attractive. But, to right conditions as a a does And so, traditional to this does we think senior

Robert Dodd

quarter, assuming it next odd policy generated and reasonable, can, the And your if would in tax? or timing happens spillover year? distribute nothing pay your so, can. one currently? realized of continue I excess whatever Without would large course asking your realized form fourth expect I the that And Can of or to to large give excise on be of the wanting not carry if gains final one spillover also, us income that during gain. in you obviously would realized you number fiscal the size, amounts specifics would you you And say income

David Golub

am to part will I that So, have going wait. of to answer part question,

the an for about question you have income, dollar spillover exact now. I don’t So, number

into to about we’ve back desirability can you second view excise tax disclose something my paying question, what and is, with me changed is no. to on to come capital it and capital that Let annual I that has of shareholders. your can pay the why an excise can part you there reason think look tax, you capital that. retain to that Vis-à-vis BDC what the by avoid continue to the of a return you answer if and The good tax shareholders? no disclosed that should avoid returning I excise

is day, Now, Board any it mine dividend alone, of not is at a decision. the decision the end

I that clear, I’m my what dividend The of So, will Board appropriate not CEO, decide it be saying want to as am that I speaking representative Board. when but matter. considers as is

Operator

Our comes sir. Please Corp. Christopher line Securities with Testa of National from question ahead, next the go

Christopher Testa

the David, you talked about and broadly signs market more lender-friendly. syndicated the encouraging of becoming

Just for curious, blip to have would be a this view your be were something this you how lenders? as in long to but that positive opinion, to as not before sustained that’s going and actually snowball

David Golub

factors the the case think market the to what going that in to And answer. is, I guess, question very sustained hard in be really because broadly syndicated answer in see September is of be going many in a see I month to right focus now telling. part to bounce are impact a I’d September, of there a say right which I either going on new we’re That’s to to to is June, a month on the or in of spread May, September. sustained back the I the likely early that issues seeing levels thing think April, trend, we’re we’re marketplace think were September in present widening

Christopher Testa

in what debt pari subsidiaries few to for unrestricting with rates, just be the general, the what become cov-lite the expectations on all just the that nature, sticking years, And your seeing recovery curious, cycle are how changes? and with parts passu fun market, past lower in BSL you’re the the and have much are theme when going marked over

David Golub

a challenging answer. very to Also, question

view approximately For good recovery only at on a market only was on non-covenant time, because light that covenant loans not the loans, credits, it recoveries the stay was light covenant were because long light same were they likely rates as permitting particularly to but level market not my covenant is light in the light light I are loans covenant covenant cycle a next do to generally rates it’s prognosticate credits going last to done. think reasonable deals of get cycle. the through be loans light. recovery that on most strong lower And were consequently, covenant to bit or than Today,

companies about You the honest are those asked on And of don’t know. I market answer factors. lower. very am much to is, depth the of how I of documentation other by which weaknesses into the question, that the $XX,XXX the is, weaknesses. depends of the documentation and concerned recession, willingness It introduced being take among my some advantage

property are of out transfer very unrestricted, the this of that into secured is ones So, intellectual subsidiaries problematic.

on I are think, going broadly crept say, of unlikely it’s documentation, look that oh, to market, no, that come was back these that we in into going have problem. and the a to it’s no, weak terms are that some unlikely we not back So, syndicated

likely what say, think more that are thinking? to we were I and it’s much back people going look

Christopher Testa

I’d coverage. know -- agree potential you that. JV to Do reduced that team the coverage I instead? the have given guys do the is a you think JV you. route of been Yes. you the commentary performance, and had you and back or the then discussed of with having asset potential assess asset obviously and put go on certainly just just, great that That’s on continue sheet there that detail. that’s unwind reduced given And Thank your or a maybe through you mentioned your and lackluster balance loans

David Golub

are to we Absolutely going option. think about. the Definitely, one possibilities an of that

Operator

the KBW. Our go ahead. Lynch with [Operator of Ryan Please line comes from Instructions] question next

Ryan Lynch

more one on follow-up have did SLF. I the

that the the terms than about, would favorable you’re investment. starting it loan more sheet little a With broadly help your bit the would syndicated market, up balance think help core investment in that of I the talking just would SLF strategy more

So, process thought two, your in syndicated true? is And that market? potentially little does terms that the the change more that SLF does if -- one, future, about broadly is in growing there a favorable

David Golub

both senior stop I if for in SLF broadly balance focus. that think lien be that the one for traditional widening would that potential it the happens, our syndicated first focus, as secured spreads market, as the good of well sheet,

be it, don’t you be one other. I it that better of both really think than meaningfully for think, I the would for see good would them.

a stops will I second a of because think, as and lien function lien to tandem price both of move tend first mix pricing. one pricing of in those

a other clearly, question, of the be for the imagine have we future if SLF, part good where conditions, is would answer that more to we your lender-friendly yes. As

as the we I had middle that we’ve SLF that that too. haven’t hope plan we doesn’t like. senior change, of challenges would with for seen If have that And a market One is that secured debt we much as changes. traditional

Ryan Lynch

transaction investment Golub then, guys And Capital. Capital I are from all said, to made proceeds stay know the Dyal the going a minority into within firm. you

BDC? maybe opportunities the growth I could which that potentially -- think deal Am growth investment would to on really should flow that that I benefit that BDC. platform, the guess sort the the would potentially that expect of could potentially sort think I of do And the flow that your And across the So, and I the increase any guys increase thinking logic from or then, you impact across right? about expect also any investors would platform. deal

David Golub

to announced, no cashing that purchased Capital Golub that division said goal company of wherein GBDC just quite to say, the of capabilities. the within the as have was Capital Company, everybody the page. should Dyal we a is balance Last our in Golub passive, shareholders sheet management of would Very Capital broadly the Ryan out. Berman, And capital And with the increase our transaction order I Dyal on increase management transaction in stake change. to no companies. So, one staying same to Neuberger Friday, invested speaking, concluded Dyal all expect non-voting get minority a Partners, is

decision-making our any team, our the firm. our investing We’re investment team, within or not committee management changing

to We’re our strategy. also looking change not

have infrastructure going not you competitive or competitive or the consistent, energy start to equity. really is those focus compelling really, management We market if which only We’re we grow and that that think We on you premium have We returns, lending got there. lending we’ve produce and lending. in compelling Chinese can private middle asset advantages advantages. areas hard want advantages in to think

do that We doing sized with good be in transactions more permit us easily belief can to advantages help our our breadth by think well And into for capital competitive the relevance sponsors of our the will some more GBDC we compelling that Golub we strategic partner effectively Capital by do as are and that humble making other a larger increasing new What expand vehicles is with sponsors. in will to increase as really us areas. other sponsors.

Operator

[Operator time. questions this at Instructions] We have additional no

David Golub

for partnership. Thank to today’s your everyone participating Thank you, in operator. for thank want I you discussion.

conference forward quarter And call, or out you. a should few me or before Ross. have about our questions feel to always, Gregory any please talking to reach in you Thank next to free look months. As next

Operator

your you gentlemen, that conclude and today’s and We that disconnect conference. Ladies thank you please your ask for lines. participation, does all

Golub Capital BDC (GBDC) 9 Aug 182018 Q3 Earnings call transcript