Earnings call transcript Q3 2023

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Operator

Hello, everyone, and welcome to GBDC's June 30, 2023 Quarterly Earnings Call.

Before we begin, I'd 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 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 GBDC's SEC filings.

For materials we intend to refer to on today's earnings call, please visit the Investor Resources tab on the homepage of our website, which is www.golubcapitalbdc.com and click on the Events Presentations link.

also our is Investor in release section. Resources earnings available website on the Our

this being call reminder, a As is recorded.

of With that, David Officer to call the GBDC. I'm pleased Golub, to Chief turn over Executive

David Golub

CFO us and everybody, joined Ericson, our thanks Operating joining and Hello, today. Benton, Matt for by I'm Chris Officer. Chief our

private healthy are by to has senior first-lien been our of sponsors. middle-market that strategy backed investment equity to are companies those partnership-oriented For new is, you strong providing secured who GBDC, and inception, loans since

We supplemental and dividend in adjusted of today. results, to A quarter. share, share the have dividend talk was It increase permanent going an management per a framework. in dividend about credit from from share a base implementation lot variable increase $X.XX net NAV to increase, an eventful in that $X.XX forward $X.XX an strong $X.XX fee and Record the $X.XX per reduction income of X%. base investment per of new the

Yesterday, we management both earnings issued quarterly describing reduction. fee press releases and the GBDC's

We two presentations of we'll both to call. posted on website, our this referring them be and on also

annum, rate I'm walk X.XXX% plan then GBDC's through I start and my quarter, July reduction from to will a permanent On effective approved per going Board X. base fee at and fee colleagues per by the discussing the we'll the questions management on to X, taking the end. you management August X% in reduction annum

based the other cash. than basis for management assets of The fair value unchanged. the is on computing fee It's

cap applies addition other includes the fee management advisory looks chart, in features that structure. hurdle company's words, fee back and a And to existing agreement In the rates all GBDC's cumulative unchanged. the can other in the rate terms of inception. to investment one incentive of As company's base that the you industry the highest fee best-in-class lower the see remain from of

forma earnings quarter for new power. walk lower chart. and increases column results management XX, through I June the lower applied the left the pro between gold rows key illustrates GBDC's fee results. the and GBDC's The differences the The forma to you for right show pro outlined ended permanently column actual as rate how Slide reflects the actual fee in X want GBDC's if the had results quarter. reflects the

forma the see at you'll the fee So incentive management time, earnings higher. increases significantly analysis. fee the same pro decreases slightly because the in base fee pre-incentive NII are And

the GBDC's share an by NII over management forma $X.XX $X.XX or Pro reduction, per per basis on a adjusted share quarterly fee increases for $X.XX on and between basis. annualized

exact impact the one profitability the cycles. lower of on its book market of and going Now this But various way management increases and interest is change interpret assumptions. GBDC's a analysis depend is to the level today profitability number average rate of across expected that to fee fee rate

the covers that what. So

investment and on to long-term let's bar and the its investment adviser. the X the the front fee raising the GBDC always Now sought we've standard be GBDC's of that for end at and Slide IPO why. shareholders BDCs company's XX incentive turn ago, Since the cumulative set between for credit years alignment to pioneered advisers aligning talk cap performance. and about

many things changed XXXX. since haven't Now

started I out Our investment describing strategy, today's same. the call it's

a and dividend including think focus attributes equity, care BDC stable our well-covered and consistent and time. we that about, delivering on strong risk-adjusted the growth over NAV returns is So investors on most

is has GBDC's scale. What changed

Golub Golub We believe Capital's Board benefits long-standing GBDC's its the And consistent with of the it week growth win-win is consistent having fee the structure. industry-leading management was shared move With In terms focus that GBDC's by to revenues XXx has time lowering at over on to Capital. last for total shareholder-friendly size assets, proposed Capital's of growth commitment had solutions, a the fee. management BDC GBDC Capital is come with Golub of IPO. today fee higher Golub that this

In Let's shareholders up before Slide our change. GBDC's was view, call. turn part X this compelling value to of proposition to today's this to wrap

has is Now to strategy more We sponsor-backed even for senior rate base on sponsored With attractive spreads a companies. it's compelling. particularly time both and focus believe environment, secured the high, GBDC right floating loans finance. for today's resilient rates now a

Golub scale breadth competitive think about on is and you've execute the heard and right advantages the wide me prior Capital incumbencies, we company's and relationships GBDC's adviser many solutions sponsor calls. competitive powerful of a advantages investment to strategy. expertise. include Second, on manager talk has These industry

also has low investor losses. credit debt decade There's through credit a defaults proven and track Capital just a both of of of private low Golub prowess named XX-year Capital and lender its reason lender Golub the the decade. senior record

attractive, long-term model it between GBDC's finally, structure Third, creates very funding resilience. low-cost leverage we it company's of even adviser shared and gives that and going attractive the strong its success. we more fee on think forward is and shareholders believe GBDC's alignment goal the structural And investment

the presentation. off Matt the I'll over in to now earnings turn floor to us start

Matt Benton

David. Thanks,

to XX to GBDC's presentation. Adjusted NII Adjusted increased moment. let's to XX. were share in back share ROE ended Slide per to equates in quarterly $X.XX a significantly turn usual come company's on a our I'm This We'll from earnings going of XX.X%. an X. quarter per share earnings for Now quarter ended NII per record that the the NII start point adjusted to dividend. March the $X.XX June setting. exceeded

equates portfolio prior NAV per continuation by $X.XX XX.X%. share The increased reflects quarter. per and of June share GBDC's XX. income the quarter. $X.XX share to the of of as $XX.XX March per from Net The update from per sheet share increased ROE generally $X.XX This trends XX to an balance to the in

growth. of less but credit and date, than been remained muted deal of migration, interest the economic We've we've remains Net the continued. rising drought we credit seen slower performance degree portfolio migration the growth market-wide despite to Overall funds as expected. GBDC anticipating solid rates credit

performance ratings X.X% remained and of decreased Internal investments value. to stable debt at total non-accruals fair

cost GBDC's unsecured debt balance nearly funding available sheet, and XX% the remained the of with low side of of mix. liquidity. $XXX debt with quarter flexible the million On the representing about total highly ended GBDC right

authorized variable a forward. is more GBDC supplemental higher ratio change on supplemental detail The page dividend shortly. dividend to to expects the in to an distribution policy. well-covered The GBDC's $X.XX raised is distribution on this framework distribution last of base the $X.XX Board exciting of the quarterly This higher by will share The highlight The a regular with discuss per Board top share. GBDC's per consistent XXX%. with also coverage new $X.XX of supplemental that new going Chris implement dividend. distribution was

distributions per June share per performance. corresponds total, share fiscal Board to In of $X.XX based in This respect on an annualized as dividend GBDC's the XX% QX than approved of XX. more NAV yield of of

I'm going to to to turn Chris? on Chris it detail provide now more over our results.

Chris Ericson

Matt. Thanks,

trend Turning low-cost rates, how see adjusted earnings environment. drivers translated attractive per record to earlier in in and credit NII Slide key mentioned GBDC's short-term leverage can current Combination interest into per the of fundamental for about NAV power growth continued the X, of you high GBDC's share. solid we several drove share. talked enhanced a earnings profile spreads quarters We've

that to in fiscal see, quarter. our third As expected GBDC's that and our you potential we confidence approach meant earnings can in We've outearned in also considerably dividends we to forward-looking GBDC the its the said reassess did. future dividend

rationale that Slide policy on key the highlighted. Matt to changes dividend it's for the through for turn supporting X believe two Let's provides X and to to details. investors important framework. GBDC's understand the change Slide the walk additional to detail We

So details. let's walk through the

of the of this GBDC's base is XX% $X.XX per dividend a enhanced Board stable and in well-covered GBDC's our objective remain growing assessed the to light in NII base by dividend First, to and profitability. GBDC's The time. increased We appropriate NAV is by share. believe was adjusted change over over new context

plan on Second, we stability line resilience to continue generate framework one on implement of the goal a GBDC into the on based hand. sight GBDC distribution other the forward. balance that expects income, excess is likelihood equal, the that NAV this how was on going Board hand, framework and variable to focus our all to give else to approved will shareholders with distribution of supplemental The a clear supplemental the that

arrears In variable approval. the short, on XX% quarterly quarterly supplemental in distribution, the stability distributions based distribution oversight of adjusted amount and supplemental by which quarterly subject NAV paid Board's requirements framework the discretion, will propose regular and the to exceeds NII

is fiscal QX, amount payable the September. in supplemental $X.XX per distribution For share

additional Page framework distribution supplemental the about of find can You earnings the XX variable presentation. detail on

increase X.X into dividend in GBDC's of a per GBDC's the slide from shows to how yield. increase share percentage XX%. at estimate two base that in We to yield the the NAV policy a of to XX chart dividend dividend changes point go-forward X.X% June on corresponds higher translate $X.XX The bottom GBDC's to annualized dividend as the

The on blue yield a XX.X% GBDC's for shareholders is point stage to We're annualized. excited be GBDC's and changes another shown NAV set supplemental dividend prudent these in more we manner further that to X/XX light enhanced the distributed believe in increases distribution X.X to percentage by of earnings understandable. policy power

details ended XX. Slide GBDC's quarter on key Let's financial points covered of now results the the go We've through XX. the for June

delayed origination slow modestly Net activity quarter-over-quarter new on sales start quarter. summarizes commitments has we'll and investments. activity fundings fair deal So as increased June existing the in year draw term changes Market-wide of remained quarter. since loan XX last which and our value investment slow Slide exits, exceeded and XX, for funds the been

asset in activity the calendar new but significant slide, of second improvement is the modest deal our to more likely is loans. The predominantly our XXXX sense acceleration pipeline shown a of for the that in the event. half be a seeing remain We're middle investments a of year, one-stop mix in

average X.X%. on market points the Looking basis rate base rates. basis primarily due at tightened weighted of higher Spreads points the investments this new XX in increased the slide, reasonably are weighted by average The to bottom spread quarter, on to stable. XX investments the by new

origination This said than quarter-over-quarter spread in this, we about conditions. tightening have resulting months. change market Having change from is signs a fluctuations primarily of due modest seen rather to in some activity recent

XX Slide GBDC's portfolio shows overall mix.

that GBDC's investment with loans one-stop Slide XX% XX size investment continuing see, As consistent portfolio XX average diversified remained of by value. points. portfolio an quarter-over-quarter by fair shows remained at approximately represent to Obligor breakdown portfolio of highly the you with basis type the around can

of rate a XXXX, to resilient floating XX, XX% industries. our June what of of investment senior first-lien consisted across believe of portfolio loans we be borrowers range to secured As diversified

analysis GBDC's an showcase the of rising on Slide economic The of balance continues nature sheet environment in interest asset-sensitive XX to rates.

to Let's the interpret chart. walk through how

discounts. and line, XX dark a the investment points, increased our basis amortization teal fees line investment from basis yield. is debt, income income investment the yield with income cost interest which XX of as includes reminder, increased our points. contrast, only primarily rates. blue GBDC's by Starting yield rising of the And By

average net the a our XX investment As spread, prior line result, the over weighted quarter. points increased basis gold by

back now. I'm going to it to hand Matt over

Matt Benton

Chris. Thanks,

Let's a decreased take at overall to XX investments X.X% closer message to fair that non-accruals and metrics. XX, move credit quality points total at of can trends stable. XX basis The value. Slide solid and debt look On is that on by and XX quarter-over-quarter Slide you credit see remain

and as both a points to two than on investments. slightly of fiscal the in debt of value by completed non-accrual companies, non-accruals been list previously XX, total non-accrual. basis investment fair disclosed costs, We As proceeds have watch amortized of one long-time March higher percentage XX restructurings for of of which QX investment we decreased X.X%

small majority investment were one Those placed loss two underpin quarter. the and unrealized Also this gain restructurings about fiscal realized in on tiny status. non-accrual one QX, and the

trend XX ratings on in shows Slide the internal investments. GBDC's performance

expected has June expected X, than XX, X are rated loans which fair been low X most points. of were are lowest of XX to fell and underwriting. XXXX. at of value the significant see basis as loans they're portfolio or performing The the of GBDC's proportion very the already which XX% As rated since investments an X, means at March around better level or we X.X% of believe That's to from likely it credit impairments,

loans The X proportion increased rated to modestly XX.X%. of

are and heightened automatically recall we default It Category expected You'll necessarily or or that loans below X, scrutiny expect that to below Category to loan expectations. When it X loss. a are perform doesn't oversight. triggers expectations mean a migrates performing

of terms our Now what better if is back, overall the a expectations in take start we quality meaningfully at seeing step the of we're year. credit than

migration zero in in in X credit expected. credit heartening We migration the in but interest expected given rates our the of shown To-date, Not terms twos. seen ones less economic we've and degree of modest the and migration, movement uptick is rising very than category portfolio rating the slowing growth. by

We see consistent performance. What to also said from earnings lender GBDC on season is that we've increased we expected dispersion this. seen with

talked we on first a vulnerability rates, borrower about relatively undertook a on laser-focused factors resiliency of year ago, of like own borrower our us multifaceted potential and quality we small dispersion sensitivity we Finally, interest to portfolio of screen made tail for analysis a inflation, view borrowers. described issues. range our on earnings recession by About the

We with were sponsors to working for about error. vulnerabilities small management how with a talked tail then and margin borrowers we our identified we and increase how teams of their

work. to continue this We do

on our to earnings of portfolio, resources advantage team to deal versus underwriting and early liquidity. trends quarterly shift basis in Our analysis most particular for in updating slowdown action. has revenue looking taken actual and activity detection projected in growth, our early at of now a We're the

our portfolio preponderance that shape. in continues give good work the the far, of So confidence us to is vast

we've be a Now early. surprises. on are fact by But me we're we It's that few the had encouraged not let credit cycle. yet new through clear, too the declaring credit victory

a the on work of well the I current data children, companies and problem to adapting to think of resources preponderance we environment. lot we're our seeing robust are have vast set points that a suggesting

call Slide going active to key more attention this GBDC's We're we past statements, other we our through detail under quarter. skip and These is continue to The to history slides dividend only program share that have item repurchase be financial would metrics. on XX past XX. your

repurchased $XX.XX. per repurchase activity million price we X.X our XXX,XXX quarter, to year-to-date repurchased share at the shares, During approximately weighted bringing total nearly shares average of a

GBDC decreased June outstanding to ended result, XX. from a As XXX.X the XXX.X million quarter in shares million

Slide see You this can XX. detail on

by section GBDC's this to and before back liquidity to reviewing capacity XX XX. close up David out on wrap Slides it investment I'll over turning this and

key the on focusing takeaways on by Slide XX. start Let's

cost average group lowest which of peer of X.X%, quarter Our BDCs. ended the among we was weighted debt XX, our XXXX, the believe is June publicly-traded for in

them XX% of in have X.X% a of which fixed rate of with notes, average form issued any XXXX the and swap powder commitments provided rate revolver We for and unsecured meaningfully million from unrestricted our XXXX. our the the with these debt did funding cash, over unused undrawn of of revolver and dry in adviser. by maturities ended out unsecured We quarter corporate of floating exposure. on notes almost majority $XXX our is collateralized weighted not the coupon

Moody's, almost over three important unsecured represents importantly, current commitments. the investment from its liquidity XXXX. our low robust GBDC's Xx in GBDC's underpins Fitch, unfunded and funding asset our is diversification, element of flexibility, due cost of And of structure S&P. an grade The notes amount Xx and ratings April that

it hand Now for closing I'll over back David remarks and to Q&A.

David Golub

NII was today. strong a keep excess a sum taking and I'll my problems excellent. performing well ended lot the dividends. to XXth Matt. credit quarter Adjusted focus early perspective June To is covered from since our GBDC's Thanks, closing share The per corrective early we sustaining up, and performance for brief losses. was well credit realized on detecting and of action our we're in generally portfolio minimize remarks

part, industry balance our this And reflects GBDC robust our the bottoms-up quarterly long and fee this borrowers. including multifaceted value and of proposition. strengths and reflects losses. platform with into strong of an sponsors believe Capital low competitive In advantages scale, GBDC's borrowers, credit record sheet structure. leading resiliency track of Our also market with relationships expertise has Golub a part, exceptionally deep in powerful portfolio analysis XXX an review has the compelling more evolved of than today We ongoing the

management X% We've of for earnings history paves the of more to shareholders X.XXX% from the GBDC's policy distributed raising bar And dividend by base lowering continued fee new our GBDC's to annualized. to be power our enhanced shareholders. for way

we'll for line questions. that, With open the

Operator

[Operator Instructions].

Dodd Raymond Your from of first Robert line the comes James. question from

open. is line Your

Robert Dodd

on the adjustment, Congratulations guys. obviously, favorable Hi shareholders. fee to quarter very the and

credit I of point, sort back you What it to happened. On sounds like migration mean, a was down it things more, credit looking you? mean, and I hasn't better. to surprised on averages, industry expecting were are your topic. course deteriorate below I mean I too, of the

So than you how be expected companies, robust, more have your which been to robust already expected?

David Golub

learn to I Robert. question, great about coming to over of one, And So think, we're more continue the going course quarters.

expected has So One I factors be key it least to been I performance at would better point several underlie to economy the than that generally months the expectation. that ago. six is or nine than stronger

when surprise. Market a quarter single-digit for revenue did the strong robust, growth was numbers numbers EBITDA most last we talked fourth the that saw XXXX that recent looking Golub reported It of like first pretty robust. similarly mid still and The showed We high not a about the quarter. saw in the single-digit and for growth single-digit, expect little fourth We for April our Report significant the companies revenue weakened numbers. be instead to about all the I at not Capital numbers Middle still high was EBITDA but in quarter, we of how recessionary quarter quarter. in

one think I economy is than has better the expected. So been factor

that have expected. than environment higher been rates second to to interest factor A adjusted better and inflationary has companies

private this think of companies. true is I equity-backed particularly

greater private the public equity in private earnings and the I of is better. think ecosystem greater think out, seeing ecosystem doing performance data equity as the And performance the comes and earnings distinction markets. you're a between I the

means is that partly selection. What

We're very It's more better recession companies and think likely our they're I challenging to are we're the resilient environment, portfolio, a borrowers also our it's would have two. look case power. I and challenging and our to less say be have sensitive are And power. that they seeing portfolio proving think at in that But seeing we're managed. that I PE-backed disentangle both. generally companies pricing our generally from pricing seeing those nicely

to our we A very Capital. credit third unique our I It's underwriting. mean are in is focused factor Golub selection. downside

we're so our taking to competitors risk do of resilient here consistently firm tend the of times, enough better we resilient we're And focus not pays now, credits play booming over risk take do, in we of at life some And times, more and and think our I in seeing some factor they're than the because and challenging well. off. on like more that as third what businesses seeing

Robert Dodd

I well you appreciate. compression. as Is of by the better The would mean, for this A-grade of add-on sellers than refinancing? the And emerging getting that versus than rather kind anything rather year -- up. starting and in in closing outlook activity more that you of you. to between on a to is the platform activity seeing that are mean, On pick are theme high-quality Great right more quarter is spread new companies that, originations, see kind new Or there's competition? platform I on? a today? color. there like-for-like, Thank the bid-ask But is an more later buyers I mentioned compression? and And could that that we now. result spread businesses as emerging seeing going kind is spread broadly terms tied on

David Golub

unusually about relatively activity dramatic. finish One We're Yes, still to not a slow environment. of line. express of some points seeing want of But it's an I'd increasing. a proportion the get high of And I deal couple still a seeing not signs we're deals caution an also So to still seeing is actually make. we're optimism pipeline. improved on degree

needed conceptual reached the a There apart. So a preliminary is falls between prior closing due for agreement a There and would sponsor and between closing deal seller. a a that's sale. is equity somewhere be that to the common diligence a private and to done agreement is story, company be Robert,

in not XXXX. okay in a environment QX. that So expecting see scenario robust That's But activity actually see calendar for I'm don't activity likely calendar QX. We we deal I the until in major may more deal a better pickup think us. is

form in deal the continue We reasonably add-ons add-ons pace. get place lot a flow take of good at to our of a and

fund. draw going be delayed a that to GBDC of in lot loans term a portfolio Again, slow if not at the we're beginning we're to have not see environment. troubled greatly We we are continuing

if we slow, up is second There to some question, was how that seeing the comment which element are that made so your does with -- deals we're spread that link a compression.

compression deal relatively attractive are to transactions we've is that precisely new slow. There think activity market. coming because I spread seen some few are so

participating And deal so market, to in when in of they you're seeing transactions. a come great lender those interest

essence XXXX of of spread demand low and the in of So May seeing led we're widening XXXX. started that in loans some impact of is June for to supply the some June reversing decrease that starting in and in

don't to we the quite Now side, lender sound want other borrower shift make I think away shifted favorable. we're starting and But I this conditions don't environment. to to see lender the to we've we're still think are pendulum from the have. a like friendly starting in direction. friendly I move

Robert Dodd

Got a the appreciate Congrats lot. Thanks quarter. that it. on I color.

Operator

next Your comes question from KBW. line Ryan from the Lynch of

open. Your line is

Ryan Lynch

reiterate Robert's Hey quarter nice in also win and the in for want to the shareholders reduction good permanent the just fee. base I comments. Congrats big morning. on

I to up, think a excess that's up, today. be win the really My with supplemental dividend I the dividend. first where you had there's around understand set for set XX% dividend above program. specifically how of do that core earnings payout policy question that's to nice new going the shareholders a

dividends special will out you excise and additional earnings? expectation those to depending guys you will those earnings? the guys earnings NAV my basis, longer-term, to paid dividend. the be time-to-time, earnings, the there from pay the form a excess was those dividend going on be are core guys So taxes it that that on that question continue quarterly expectation earning Or is are now above with you of grow retaining over retain some Is additional

David Golub

a our may highlight Ryan. great a to you, as I question, set others. pass-through that of Registered be obvious our need one tax order of we a is Investment we There know out obvious pay it's are certain but a And tests sustain of portion to is to something just So that those not treatment. to taxable meet tests need Company to above income. to that And in

don't pay hate -- there's It's excise at paying excise Capital And everyone interest. the tax. excise any an out paying X% in due. essence, amount that -- I believe portion it's is in tax. hates tax of on we're Golub excise tax I on a that's a in shareholder higher long-term We keeping think of cost on. that excise It, that's not that capital that and we capital

that, it pay sometimes Having GAAP income be between tax makes excise sense so taxable to said are if going is differences and we There income. think doing to that transitory.

it can And year one order a out. balance for of these couple sometimes or take years in to

tax. So not of excise policy paying running a avoid to there's distribution good approach. any answer no a perfect That's

Having a said likely continuing would pay tax, be excise pay into in position we minimizing mitigate we a very where otherwise if heavily we would to excise to whether and that out pay of what assessment to specials, that, taxes we need to factor get our special. special a order

Ryan Lynch

Okay.

it's I a process and one-size-fits-all think and with answer. takes. sense, I that makes complicated understand not puts a It's

is other very your this portion mentioned question expected was underperforming, you BDCs be which a in environment. of with I to The small portfolio all had is maybe

more you slower little are has private basically since more I deal bit putting equity with guys been having and think on you some the a sponsor. investment those said that professionals conversations environment

conversations these the going certain from those or as make conversations I'm equity as their just joint companies know together individual to solutions But that love support a have investment high ability going us in you I'd willingness each more -- private can provide sponsors perform are curious this to Obviously, far on and any circumstances. I to going? just level, business with is hear these individual and how viable how insights are sort work better future? could of

David Golub

general, I see, good. in

continuing higher there's equity are that companies eaten the for and example, that for strategy, companies very want into I margin per for buy-and-build many error reality have think need that realistic that capital. about the continue many for a a to interest rates incremental private sponsors

order to sort. a we're solutions. are continue sponsors a this generally things is solutions. an that acquisition efforts think in So activities the liquidity value very think capital those are creating about continue solutions. to Ryan, And strategy, the - lot Where the discussions I very what capital in in having, are of margin order error, are interested receptive grow would of per to program, more to give order we market in I call borrower These to

all productive about changing There additional of said lot general, a characterize very conversations in that, there'll discussions I most a bit those sponsors ones, adding a additional The issues nature of are not higher a conversations, constructive. with by their junior equity. interest be where And Having we're rates. some underperformance. challenging The capital, those not are the augmenting management, strategy, as are adding in surprisingly, of consequence consequence the which conversations, issues problem are children. seeing always trickier, are.

Ryan Lynch

syndicated with. last to Got you're question owning and capital private credit I banks, but markets providing aren't guys funds then play credit of both loans, a my banks know with broadly, big typically competing competing that had CLOs, you then in facilities role And directly pieces ultimately the credit I broadly owning was, it. obviously, individual

just banking hear, And of So that sort models little to now had and business new months just curious I'd I'm world that the love a away banking in. several mini maybe that we of the banks we're had bit to any the that sort adjusting in you we're the crisis the seen from that the markets you've are longer-term? volatility we've in think in sector? kind of -- have anything do all been there to of you comes play their impacts

David Golub

area longer-term. is critical it to in of a think is the I come this a and lot Look, going

is I substantial very And commercial banks. in in degree think a and real America in back to from largest real they the lending not think small I It's are to central in estate. point that our for regional commercial this pulled The discussions estate activity. investors world.

So it to with estate debt respect with an real a to or go is going capital. reengineering need And recalibration through to finds where period value. respect adjustment to period its

that, going replace by real impacted indirectly used capital impacted now in we're ways lending. but in directly we're think to capital to other because is bank flow don't to that I be going estate

see order impacts I second to that, just think we're Ryan. of order, beginning the third

in has into portfolios, not banks which impact, market the direct against interest middle higher perspective, the pools of that terms in is amounts of rates our and From fixed capital bank that is, surprising in on income the eaten gotten This the their have of context again, lending I'd one that loans area lost have context of ratios. tighter. highlight their

of credit because platforms works advantage BDC their relationships. clients to their when strongest, prioritization investor will have clients, they like their to think the and banks So actually make prioritize amongst Golub largest private I market-leading this decisions Capital,

that's also, So I It's some from currently a standpoint. think us degree, a competitive to challenge. for a help

Ryan Lynch

Okay. shareholders for time in I the the again Understood. much -- and the appreciate and me change appreciate very structure. appreciate base very That's fee today. all much the

David Golub

Thank you, Ryan.

Operator

[Operator There Golub, no over at Instructions] are I David turn back you. this the time. questions further call to

David Golub

always, then, to for to free next this if out. time much Thank you opportunity you, you, talking operator. I you. look over today. of And quarter. us appreciate to with you as sharing the the quarter. your any please go with feel questions I before again reach very Thank Thank everyone, have results forward

Operator

today's concludes conference This call.

disconnect. may now You

Golub Capital BDC (GBDC) 8 Aug 232023 Q3 Earnings call transcript