GBDC - Earnings call transcript Q1 2025

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Operator

Hello, everyone, and welcome to GBDC's earnings call for the fiscal quarter ended December 31, 2024.

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 the Events Presentations link.

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

this being David call am reminder, a As is turn Officer GBDC. call Executive pleased recorded. With the over Chief to Golub, of to I that,

David B. Golub

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

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

with our go So the yesterday, earnings press operating we We'll wrap presentation going start December we'll the headlines, period, XX financial detail. our Matt usual and for call. I'm on in for are and I'll open issued And be floor an and the earnings posted some finally, then and outlook today's coming release Chris to through that our our to during questions. quarter for more we for and the referring with to up performance website. quarter, going presentation as

So to headlines. We year that The [indiscernible]. our strong had be hit to aspirations good fiscal [ ] XXXX. strong a headline quarter and a is start GBDC

share the of NII corresponds return are XX.X%. was on Adjusted Here NII to highlights. per equity This $X.XX. an adjusted

Adjusted GBDC's the XX net The well $X.XX adjusted net share. interest continue equity an to performing you share on to $X.XX adjusted per If per vast portfolio expense per interest realized income NII December of was exclude share. the was impact rate in $X.XX swap, well our been actually unrealized corresponds return perform the noncash XX%. and was and related Adjusted per gains. of to that has quarter. income This adjusted of some majority for share quarter net of included

investment portfolio GBDC's this saw also saw in In growth GBDC's in fact, lift nice portfolio. credit nice we overall metrics a we quarter. And

to the in Matt leverage. With able let start discuss Slide to investment the our to Thanks, New in detail. remaining find X. pick attractive while deal going market, back to up opportunities me call to us to was I'm target and activity David. on more over Benton continue get enabling to GBDC the selective, pass quarter that, highly

Matthew Benton

GBDC's by key factors. earnings were driven X

in credit overall recognized First, all some losses quarter. These restructured solid. were the investments the more performance progress X Overall, that realized picture was were on the September these than pleased with nonaccrual of We share at nonaccrual how elsewhere. is we're GBDC's in losses visible on gains XXXX, as offset but end credit quarter credit and we'll by metrics. GBDC, investments XX, were

are the more is in less left repricings loan context the repricing of than large repricing existing of the dynamics market core drive-by market prolific large quarter the Repricing investments, portfolio. At of are current we market in existing and the within middle from risk book. in some believe high primarily where portfolio GBDC's end, said supported continued pronounced Having spread continue compression. The seen earnings quarter, more by this, reduction with spreads, visible in in a we in consistent lesser but some compression from investments, and SOFR base spread yields and decrease new to Second, to a this recent we have and attractive was be see did extent, quarters. market there spreads analyzed our particularly common. rates some limited

in benefit fee in initiatives funding $X.XX get of costs. from Fourth, funding unsecured notes. the structure. borrowing on from get and a noncash rate the swaps benefits quarter. lower quarter, cost costs $X.XX rate benefit expenses a the last in per fixed that related quarter's both share. funding those call. We NII lower continue interest base our XXXX $X.XX approximately XX earnings on full of because structure realized expense Adding negatively share associated we November that earnings GBDC's interest We'll discussed the we in reduction noncash didn't the of Third, expense with NII decline March the rate adjusted with impacted to implies quarter on associated fifth, by interest were back due to per from And adjusted to impact per earnings share quarter's

Last in calendar more earnings Let funds this the environment the and weighted. the sequentially. Investments QX saw see the compression, higher quarter, quarter-over-quarter. lead origination to of were $XXX EBITDA median Golub in up lending Ratings all our to in the acted believe nearly versus transactions; of approximately the XX% in is I solely rate selectivity generally for more XXXX, last credit portfolio net we in We given repeat of borrower-friendly sole growth repayments This quarter two, growth less by credit from in especially full $XX as four, did in of million to increase me approximately After and we large summarize origination the entire market quarter, middle portfolio differentiator calendar nice continued where many was leverage as large peers our sought lot a runner of from receive QX percentage improved leverage. Despite benefit are XX%; was growth December said our five, December and X portfolio in on time the of quarter-over-quarter. One, focused of in the because we getting unfunded conservatism. core the market. The markets. back-end net depict statistics quarter. XX risk-adjusted quarter. to to portfolio commitments the value choosing was post XX% associated at Credit a the Golub across market. increased play of X%; continue increased quality fair at borrower we not than documentation as Capital's primarily with this continued dynamics originations spread LTVs segment X This X.X% activity our Gross power stats looser been this, category billion, originations, merger. Golub deal $X.X market, of a the and represented factoring prior a the mid-XX% the XX% or mid-XX% excess XX, middle to XXXX have million. for across originations our book and average of the in borrower pricing three, of range; GBDC

the marks of X at X this and just very total of the context, to X Category in XX, the combined from since X-rated fair X portfolio September investments Investments X.X%. GBDC portfolio rating level remain XX.X% fair at value. XXXX, at For highest the in XXXX And value rating investments X.X% as categories quarter. September representing of declined of low, and

in principal declared Slide quarterly decreased the reflects the special $X.XX base NAV basis leverage Total XX/XX This leverage X the on were special of percentage to investments As in trapped equity quarter, distributions XXXX. quarter-over-quarter in very conjunction net lowest Net of X.XX And to X, debt available a X since at nonaccrual paid turns. sequential share briefly value, $X.XX per restructuring share summarize November investments share. quarter $X.XX distribution the just $XX.XX, let included: last declared was at share; the and X.XX GBDC net the in the notes. Similar sheet distributions This a to paying a outstanding one, GBDC to per me X primarily because debt the $X.XX to the including XXXX share last a paid at the that in for the level in variable per points, low we $X.XX cash of distribution supplemental decreased GBDC's of final net the distribution quarter. X.X% increase XXXX, two, total average paid, balance exceeded investments. Continuing XXXX. quarterly quarter, increased number closing. nonaccrual certain largely the earnings. following fair securitizations in on merger of turns. from investments per former XX, quarter. the per with of on distributions cash changes during weeks by In just basis finally, and down leverage XX the and few of distribution purposes nonaccrual quarter to June September happened declined

the the to securitization Further, turns. As quarter. rate a net of expect drive target a including average down portfolio to securitizations debt we average current maintain recognize GBDC's investment AAA with we of SOFR cost with GBDC debt and pricing, larger some a cost XXXX, we plus to funding-related its our In transactions GBDC facilities. redeemed debt expect full November at X.XX CLO of of debt, expect points. next term conjunction result, debt near run weighted billion benefit In priced series GBDC XXX we leverage we basis higher notes $X.X profitability executed

have debt. Portfolio our rating restructured March to incremental to the NII. work extent the We these issue run but think and with a rate and NII expect which outlook, will obvious incremental low-cost add to subsequent XX, believe proceeds low-yielding do quarter, equity certain I'll have we from the to of we in these of prior we believe ability market full will we profitability adjusted forward valuable the believe and transactions XXXX those skills benefit successfully profitability cushion get that be the with that further or loans the on, to middle generate spread that to new existing we our names, rotation. this base profits to all drivers do structure, core names cost enhances are was several further non-earning investment which There monetization associated this. it upgraded reductions. by other unsecured working look successful of including caveat across we the are with we a as that a originations Moody's redeployment resolve include funding optimization happen overnight, higher stable we rate borrowing won't could investments into We GBDC BaaX quarter resources recognize

of the December Adjusted continues interest NII GBDC's to distribution declared distribution provide coverage to of a per distribution, quarterly yield The to per distributions XX.X% on in us share, based share $X.XX turn regular per the share an cushion adjusted swaps XX, related a share of rate dividend per XXX%. from XXXX. noncash as Let's $X.XX annualized declared NAV our quarter. regular providing quarterly impact Board interest above of comfortable expense representing for

since We expect per these X/XX/XXXX going would pieces some I the some Slide page I on but share, positive X. from perspective generated benefit Slide profitability X, adjusted $X.XX that couple be of moving I X/XX/XXXX provide $X.XX included skip adjusted it of as share. is on NII to was helpful to the cover our which noncash quarter-over-quarter quarter. the per share think cushion income Adjusting quarter, on swaps, waiver earlier the last In $X.XX GBDC the want do also drivers forward. Typically, profitability share $X.XX What a don't this quarter shown those we've which of incremental GBDC's impact I quarters. is had from see NII included items, last It rate you a fee. per the partial incentive we GBDC's per for $X.XX discussed X interest discussed of

This generated quarter, mentioned NII from earlier. There after GBDC the the quarter. as waiver an interest $X.XX of rate impact swaps fee was this I incentive not I noncash adjusted income mentioned, eliminating

an quarter-over-quarter apples-to-apples adjusted from on is given $X.XX. $X.XX modest to rate GBDC base a NII in basis, So saw spread the this quarter. the a movements decrease during solid think and result We

to given of So on liabilities NII its adjusted the XX% side? First, rate. how GBDC minimize headwinds able floating the the to was are reduction rate quarter-over-quarter

borrowing from benefited costs our SOFR decreases. So

We benefits the outlier environment. the better and reduced decreasing as the sensitivity asset neutral most think over is year, meaningfully GBDC do have and positioned is GBDC's decreased. an for a in seen we've past base sector rate than rates We base now

leading Second, buffer. I'm GBDC's third, going turn financial And structure now modestly it increased our return fee creates GBDC higher to structurally continue over a to to presentation. Chris leverage.

Christopher Ericson

Thanks, Matt.

to Slide X. Turning

XX, NAV value how You December increased Net $XX.XX, earnings the distributions size quarter. we were and quarter. If share asset quarter-over-quarter per share. turn million, below origination down $X.XX the results GBDC's the share prior the Adjusted of decrease share a activity aggregate September the during $X.XX quarter for which in just details distributions NII drove gains the our paid X.X% these Matt and XXXX net of funds in Slide translated described out $XX.XX. was per of versus per per from representing portfolio total per XX, share per share can see $X.XX paid unrealized per $XXX $X.XX into by realized to to excess increase drivers XX, XXXX. quarter, a Together, net share

at And the the the investment Matt portfolio at outset, mix. portfolio weighted the as Looking quarters. Slide average slide, investments the Investments from that and shows a overall described were David XX bottom at on of to prior was XX.X%. average GBDC's on rate of rate lower repaid X.X%. this a new weighted quarter the yield in contributed

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

Additionally, investment and represent just portfolio largest our our XX of portfolio. largest of represents XX% borrowers the below borrower debt X.X% the top

We modulating cycles. in position are served we well in previous believers risk big believe size, credit through has credit which GBDC

of investment spread industries. The December lien X%. the investment what across of senior rate economic consisted portfolio a As be on first XX diversified believe change our secured range loans of analysis Slide XXXX, to drivers net GBDC's XX, XX% of to highlights of to resilient in we the floating borrowers

We'll in income the dark start Let's walk this which our through yield. with blue slide line, investment detail. is

which the X-month weighted activity GBDC's points investment spreads average includes to And floating to and amortization the extent, discounts. fell a lower much portfolio, SOFR yield the spread result re-indexing Matt of on debt originations and investment predominantly rate investment was net at in X-month income and and reminder, the as in to this lower XX.X%. of XX% rates a a quarter was in portfolio. investments the sequentially portfolio via XX income repricing some yield fees lower As basis driven existing reference lesser the highlighted,

decreased debt XX structure. our X.X%, points debt, the funding to reflecting rate Our cost floating of XX% line, teal basis

now. turn Net-net, over described basis average we back to net as November in quarter expect gold XX we average from XXXX. further floor sequentially spread, quarter debt Matt improvement line, GBDC's in points next we investment impact transactions I'll see cost weighted a to our As earlier, decreased full of the X%. the Matt and weighted executed the December

Matthew Benton

Thanks, Chris.

you and fair value, on nonaccruals trend the metrics. highlighted On lowest ratings XX the quality basis and Slide shows to decreased in X.X% by XX Slide since total XX closer can at look at Slides Let's earlier. September of I internal move a XX, XX credit improving investments take the to Of X, are points the likely XXXX. most performance with significant see X believe at rated X.X% a note, investment be signaling compliance remained to loans could The just the decreased we X.X% loans rated investments and impairment covenants borrower of just X, low of of debt the of total at materially credit which the portfolio. see fair out very are proportion to portfolio value. level

Slide liquidity Slides slides we to GBDC's As this XX past through detail on reviewing dividend XX. metrics. I'll more GBDC's going XX. investment usually statements, do, key and other and These wrap have capacity section skip history up we're on by through XX financial

on Slide focus let's First, the on takeaways XX. key

notes of XXXX. this no due executed. with sensitive were reflecting than notes say GBDC average the quarter Our is down fixed for weighted well floating. we weighted we or is debt of through prior prior X.X%. this And average was quarter, floating to transactions issued cost The a swap the in XXXX unsecured being asset rate year in in and as dynamic laddered it you've rate XXXX our on them exposure. The structure us form remainder XXXX GBDC's and coupon less materially funding out coming ago. maturities occasions, debt debt XX% X.X%, to a rate from of funding contributes swapped of did Again, total of not the was debt floating funding with heard upcoming

XXXX. BDCs upgrade, quarter diverse senior report, with With upgrade stable the from we GBDC's a and investors publicly on capital BaaX revolver corporate from of Fitch. both upgraded rating and a strong, credit that to to this and just unused undrawn shelf highly Following one believe we our quarter GBDC's Moody's X by collection provided GBDC and is end, BaaX read from traded encourage that's of remains record position BaaX the unsecured the liquidity Moody's We ended and BBB word, a corporate Moody's track namely positive. but liquidity of the on from we not lien-oriented cash, consistently approximately meaningfully liquidity the was our rating result credit discuss calls, solid unsecured qualities our IPO ours, back differentiating portfolio, Moody's performance adviser. billion $X.X our in stellar, commitments earnings over-collateralized Overall, unrestricted a the and with of our of revolver first extending management and to

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

David B. Golub

Thanks, Matt.

So strong want before the fiscal on line the to outlook briefly questions. we touch strong to a first I quarter GBDC sum for our up, year. start and to had open a

to our the the been more has but was yield our middle core that across credit, market. segment saw saw pronounced the in spread the Spread deals than markets. of this of it's has talked deals we markets, to in Within a market completely private been today no all spread been business of the broadly to private the across than large pronounced compression broadly the credit grade the market, high new compression through risk wider in assets, and it credit market we climate. compression. beyond all existing in market look repricing markets a side credit are has more markets dynamics syndicated In in XXXX one in immune. If investment considerable market lens spread and pricing both lot So look optimism market about compression syndicated about from impacted the much been amendments. and some We

going not to that that justified? question. you've earnings that can to you forecast. before, our interesting Is bold make an So calls raises If I'm I listened think predict optimism probably some

we're so a have stay so consistently consensus last That of offer years. and of course macro predictions, said, do very wrong the observations. about making expectations over because been is not few mantra to I macroeconomists consistently the because to humble both Our couple want generally

is well. doing First observation, U.S. the economy quite

that likely how optimism, elevated these look last credit there showing in Capital highlighted EBITDA a concerned of second At quarter also A it are pick about their than But very calendar clear growth. data. the be Middle I further more the to We In time BSL are through observation, are private LSTA across side. report optimistic the in impending was other at our an these volume Our reasons this QX, do equity Market signs observations excited Dealmakers are Golub slowdown increase with let's continued adjusted row sponsors up signs seems the they see to same in think and of seem view. not solid transactions. Both revenue voting the market, Transaction ninth market. the with for for management about are XXXX. and liability tariffs. wallets. consistent of the there about publishes defaults data stress deregulation to

think ended agencies, we've also about up rising about Fitch but from apples-to-apples hard the firms law now reports at in historical entered and of It's are we're bankruptcies. way the the that rating including it. credit transactions, than XX-year I from little and show stress that's comparisons about think double. era to XX. That's right. December a liability restructurings that covering rate It's months right looking management of that's S&P look major more and X.X% major shows data the I And get for average. double at a XX to their the that of now Signs

good to advantages X successful both historically real that that We be market newbies, performance the characteristics in results currents concern. players. It's let's we've and last dispersion Capital strong expect questions. firms will lenders see coming that optimism open with that the cross lenders of lack performance delivering managers, increased businesses, for among more the be We quarters, think this not BDC once the more long-term for environment believe good in are separated period. spectrum with competitive us to type the and from to of is dispersion the of there the the has this boring warrant surprising that, So again shareholders. and the on seen and in this we'll line in we With Golub our GBDC be side

Operator

first Cheesman of [Operator line Instructions] Your Anfield the comes question Capital. today from Ray from

Ray Cheesman

tariffs, have candidates morning, the are, course, attempted once strongly steering on time. to be Congratulations changing this ship in. in declined on as up has of remaining are like evening and think dollar entities. craziness, morning how My we and this rallied fishbowl wondering the with well end of the of domestically seemingly questions very they focused regulations of come believe do I'm administration almost the portfolio this in new reduced or owner what at you it once respond. -- ended go only the the how in X being has off this and are will during and a at the manufacturing looks end exclusively X the the service week. you of I of

in it's guessing answer. I'm I'm your but not So interested much, very

David B. Golub

live in couple certainly for interesting We Yes. A times observations. Thank right the you now. of question.

in we're portfolio. tariffs of observation in relatively the foreign from insulated the and exchange construction because First of movements rates movements

but European of been business are obvious reasons, business looking We've as in As Europe. ought portfolio portion have is other since companies. A you at companies minority, with tariff of large a U.S., But the companies. significant commodity our doing is areas question vulnerability companies they're serving have companies, of underweight software do of base base the including a U.S. very companies service not of European borrowers, that in for in and election providers. portion We're proportion We're the is mentioned, possibility portfolio, that planning the most U.S. these tariffs. the -- much manufacturing. for U.S. We significant borrowers European underweight that to the are doing exposure. of are the other so be everyone in

so But basis of impacts Based think a good meaningful note teams. to think work private issue going to and order of equity our don't They're second, well. smart management knows what of have we third, over caution talented a sponsors for very I we've fourth I vulnerability all elements business we done because a news a far, isn't to that could One is tariffs. as very the with sound And the anybody. want war on order the well don't this trade be. anyone I probably on first go work

a well variety caution going to is different are is a scenarios. this do Capital. resilient those our Golub where, in pivot across are period us best That familiar So for of for looking that judgment, macroeconomic require my for And doesn't a in approach. strategies mantras

Operator

from question O'Shea next of Wells Fargo. from line Finian Your comes the

Finian O'Shea

and not a how continuing markets. there, end, just Maybe more for in leveraged talk what they're out competition, the -- play like level environment Can going of as the the terms to discussion out, We really but obviously, on in today continue direct the this forth see means . and of on loss leverage the can much and that of degradation lending. over higher it's rate so it's toward much expected real loss lending the your pointed on has closing covenants David, in to slower are importantly, changed in transparent. with direct hit but finance what and and that private. Those, you that, I time, see you We you remarks about the time class. course, asset wanted it for

for there. just seeing high-level So us any had if guide you

David B. Golub

Sure.

rates, market how same it's difference in very and we recoveries private management look environment, at market. information in is showing liability second for real-time signals liability have aren't piece. up the more liquid, form in of higher the credit showing it's transactions your syndicated today's So loan element in seeing market, seeing of management And stress more is up the interesting point, credits. are those how at management there's transactions, and We're and syndicated of CCC more of experiment in really the We One I time. One we're in higher Fin, credit the in instructive in what's stress looking the levels transactions credit syndicated at both broadly proving is to market seeing about default broadly the markets. credit transactions. difference private the going broadly on liability that bad the think an

up from of going a because that few think Virtually all successful end working have firms. There of equity of liability through restructuring certainly lenders value the the more just they delay. In a players in seeing through credit And of not It's market, we companies and concentrated private of that than tail. costing they I significant largely credit amounts delay the It's it's very have restructurings. aren't end or others. in undertaken lawyers them transfer They indicia not stress. some inevitable are advisers portfolios they're for turnarounds everywhere. to management up been and transactions. it's private broad, more

of hit of broadly means issues of Those because market the to that's characteristics control the companies difficulties, deteriorate to by over that's that credit can to covenant picture the to end we're particularly lenders is take the the and time real time has of are get market. That company that larger be had turnarounds true that One market and that seeing significantly. private the it's able the in into because effect. harder when in the issues, similar to syndicated often of liquidity as opposed situations

address reasons one lender One sole to market stronger or core to tend terms strongly number of to our we and middle that is problems prefer We able of I the be the of tend borrowers earlier. we lenders. we're have either in a much to documentation tend be small

to been haven't both And managing be at tested. are over of X underperformers? who addressing number interest of years. We're going couple going rates, that are is has One what hasn't critical private skills at how those playing And they a period at out players turning of good credit good companies the of and the And how private continuing time. mettle grown we're less higher around things second tail see see prior in over a for less to I So players the last are tested they is underwriting? this power, in is the are think pricing of is going the coming successful to good course of cycles. of credit

fare think we'll that very I evaluation. well in

Finian O'Shea

follow-up helpful That's guess the just platform. high-level color. another I Great. on

well, think Can being remarks like reach -- capital is of any, the the Golub, your in you grow where talked the a building I maybe some into -- think newer today's running and about faster? a to now, insurance to retail, origination maybe Golub how Golub's the if of closing in raised how much as more train lot the competition? that is I or talk changing of pushing the about you is on sort and players. sort out fundraising of of is faster, response lot you that's

David B. Golub

So running faster we're not competition. of because

we fact, In other response run strategy to playing. our in how are people don't

approach to to maniacally has set building growing Golub for a competitive on narrow activity. in advantages of focus Our years very Capital been

ourselves I'm a to core lot with are that opportunity that private middle sponsor of credit markets syndicated that recommit in in very the alternative. ago, we're changing era multi-strategy of and in market, credit the our So chose the we saw our an turn -- to when left decision. happy a grow market. And years to stripes not number in couple front. on and specialist large made finance an broadly a we And competing competitive brethren private the large A we of

middle of the better core one business. now dominant I a think the market. of -- are players the in one And largest We that's

us. industry, So drum it's right we in It's Fin. drum, the different drum from others think own to we continue a for to and the our beat

Operator

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

Robert Dodd

on type. A then and couple the the liability side asset questions of

all it you weighted you December average effectively quarter. On in the liability lot a from hasn't during side, was activity, quarter, gave in presentation, cost -- the the fourth the X.X%, the which the did and the benefited

give effective once or it's a full relative scale you how that scale savings the cost of like side? on us what's rate So the -- can quarter, is how just cost savings significant the liability fully saving for that

David B. Golub

the the So to going critically basis. take to great how a advantage the in how we've be side mic on last success. got question, that I'm in profitability asked undertaken hand focuses of impacting the firms liability Matt long-term just to of go-forward and I spreads we've to important to Robert, going really steps sheet reduced in to the Benton on think glad the you detail months balance because that a I'm that. more so that's team right-hand is And few our describe manage markets

Matthew Benton

think didn't the taking later question. It's investor a Page about, to it funding is which lot cost our look think talked issuing I at right, facilities easiest of shows quarter. way debt the debt out the stack, our higher inexpensive until which CLO, a we initiatives, the good really Look, presentation, effect take the structure XX of in about benefits

that GBDC had CLO of plus closed at the example, we recall weren't, took more November interest XX, $XXX million blended Securitization $X.X call legacy able XXX notes we the of SOFR We to that was that and a but basis points had, expensive of SOFR we out third-party for So X time expense at plus December debt on facilities XXX until XX. XXXX-X the basis billion priced some that points.

the with on cost legacy debt the cost facilities. quarter, quarter of average that those reflects, slide, it chunk the operating a includes entire weighted good average that over higher see cost X.X% the which for you of So weighted again,

on billion X.X% If you a to cost would in-place around weighted funds of today, be apply I it point today. One the weighted current where give lot about is page current that, to that's obviously left would parts place, you that think to weighted rate apply would when and base in where moving rates be balance look a of here, their stack cost think it debt did always there's the CLOs, for not a right you lower would at That's average par, which reference until through the reset quarter easiest almost other GBDC we the is end. the average outstanding of today. of way are SOFR the debt X.X% sheet and the that of which average $X.X base of spread about mention post for those both comprise side

So they reset January. in

about And differences. simple again, start math that's the my you it. but where see doesn't think into include again, there So to big of it, to that's amortizing the way fees some

Robert Dodd

It's Got when the ratings that. up The credit facility facility, attractive And that follows pricing. constructed helpful. it. you it's one you I another have a Got it. have mean, JPMorgan was not Very good a today. on facility,

potential run, you years So time, equivalent. what BBB got is into on do -- But it to was the BBB- are same facility? that to can when let the mean, you it sit. a obviously, if think the a that structured you want many it's -- what were do just I that at you flat you

Matthew Benton

improvement our in have that's what at as question. look some do for we of is think another We done peers market. Yes. good there There room

price very when they on got their You at record, again, that side. track have can peers how of bank look and our amended long, very facilities. existing obviously best-in-class the had facility We've place, a pricing that relationships good And we when successful facility. can some put leverage very -- we we we at close in on that. We have

we're basis assume would So evaluating plus upside that point current we're nice that be and very, very we successful, you should have definitely if there to XXX some today. that closely that the spread

Robert Dodd

quarter I flip And portfolio through active to -- And if active, continues I side. on our just go -- category X that to it expectations does it. addressed But market? unquote and on expectations. in as David, the XX% performing getting targets which activity [ to you a 'XX, more see the in that risk does that ] -- mean above can market not that ramp. significant a Got create performing acquisition create above I the fourth that as churn -- think you've asset top a everybody risk, that. was the performing I are Those tail, think -- quote the seems risk, more it What's become to as assets is think, we the what's within the if

David B. Golub

So it's question. great a

at levels activity M&A response June normal interest look fell Robert. hikes, very to post in been levels, activity rate that's overall in you XXXX If that of M&A last below the for And reason obvious of years, May, the portfolio couple of turnover the they've significantly.

environment So shift logic X loan have X-year period repayments that point, lighter lot normal. than would portfolio average and activity years, usual maturity through M&A tell of is been at there turnover be M&A you and if when will of our activity is that usual. But where than loans be think have is I to a an going life our a higher a the into activity news going and in category. or to of X when new The typical we've some loans us happens, the and also that's good available gone X- for

time. of be at we've things see would that's we've think seen X higher new seen that past kind this pattern. expectation happen my originations repayments. So same We'd pattern the in would higher both I that And and the when the

manageable. think that will period turnover portfolio make of higher the I

Robert Dodd

or that Just middle you you might would -- activity think potential question that a is churn concerned. more that? see a have for the a there's anything transactions, that Do potential change towards market one up. you add-on mix think like have larger to all be where Could that's shift that to and in there and activity between the picks -- of if that. if you there large shift the Do core mix

David B. Golub

quite have that in companies and of companies we million is transactions of range across one hundreds companies EBITDA that have loans. of in to from we EBITDA great participate platform, whom the Robert, that strengths large $XX dollar the the dollars So to small, platform, to millions of multibillion

the relationships to the advantages we're measure where going at we most the market. That's a expectation tell strongest. to because middle that's lines in environment that's continue my our going M&A in we're have our player. in in which where think we're where recent an to are the larger the period expertise our this us opportunities if being the our able in start something having call, environment gives And attractive of and that, is an of our most that's capacity to different think reiterate play to large said the that in That's happen. see companies incumbencies you're the ability core activity are adjust of attractive I So competitive dominant in seen move origination most you breadth is what new Matt if valuable. But opportunities. I of what's across to the and don't comments describing, companies, have along I particularly that an will ranges where size to our in we said we

think it's be more I across we going to to the start activity, spectrum. when see

it that But I In happened fact, the way market. it may even you be disproportionately described, if fine. middle be think would

Operator

line the Anfield Ray from Cheesman from comes of question Capital. next Your

Ray Cheesman

and place been about attractive for returns. I earn feel very a being you thanks category David, follow-up. the software including How for the BDCs, put yours money has possibly work to great to than the impacted going hardware forward wondering, was ever done with now but NVIDIA the doing as artificial only with it's intelligence side it's into with with not supposedly getting DeepSeek a adjusts software lot story, more hardware. software do

So being a going category wondering, you possibly I'm just see bucket of the do different kind forward?

David B. Golub

able software reasons less AI. act that almost is They're a how We for to are XX bad we are a software is be right very is companies. never be good for early think And a and credit But software they been software lender. of and no-brainer. software I Not be of that lot going ones lenders. good basis, of good distinguish the favorable lot and software one being to large One strategic identifying you're of good to companies skill between lenders software software were go-forward has the more couple a all started comments. to years learned lender. a able good good And companies. On harder. being of to ago understand in characteristics and a has an a been when important takes as different It being companies we've and very software very software credits a with industry Golub expertise So industry even of that positioning Capital. now

AI companies enhancing of a software to Some their clients. are proposition as use value be to able means the going for

to their software challenges are going situations some AI see arise historical where companies incumbencies. other And

a consequence to have as going think I to and winners area firms for losers important to AI. this and of the to is between order internal that are the So strong, firms really evaluate that very be be a expertise distinguish firms are in going

only need to play is and winners software at going AI evaluating at think lending losers well. I other very be that many, good Now factors are well. There firms good distinguish as as that's And are to software. going the other many not in thing to are those at factors

Operator

call now David session. remarks. concludes turn today's for Golub I that And over the back closing will to

David B. Golub

for us thank your joining appreciate all and you Well, attention time. your today. I

quarter. you please free next feel if look forward And to you issues questions to or didn't today, talking cover reach we further to always, have out. As that we

Operator

This conference participation. call. concludes your today's Thank you for

You may now disconnect.

Golub Capital BDC (GBDC) 5 Feb 252025 Q1 Earnings call transcript