Earnings call transcript Q4 2022

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Austin Neri

Good morning. This is Austin Neri, a member of the Investor Relations team for Goldman Sachs BDC, Inc. and I would like to welcome everyone to the Goldman Sachs BDC, Inc. Fourth Quarter and Year-end 2022 Earnings Conference Call. [Operator Instructions]

call, remarks like may today's listeners remind begin today's that include we I to would our Before forward-looking statements. the are of represent by statements company's future regarding These events their nature, company's uncertain the outside and control. belief that, time condition filings. factors, The differ, from from including those statements those possibly in of result to may as company's described indicated and a is in a materially SEC results forward-looking actual the financial company's what number time of

Goldman of our Sachs Inc. audio cast material This reproduced without copyrighted not may rebroadcast duplicated, consent. BDC, be is and or

non-GAAP Yesterday, Investor an page supplemental home after and be with the earnings the market yesterday annual press XX-K which a the the These with the reconciliations to the closed, measures. on of the GAAP Form section, most company's our conjunction should can company posted which comparable include found earnings be in issued website presentation, at of SEC. filed documents both of measures report on reviewed directly under release www.goldmansachsbdc.com, Relations

being call XXXX, XX, replay for conference Friday, February recorded This purposes. today, is

over the Executive I'll Officer, to BDC. call Alex Chi, now Goldman turn Sachs Co-Chief

Alex Chi

Thank you, for quarter us call. Financial Chief our you David year-end our and Austin. and everyone, Pessah, fourth Executive conference with our Chief I'm Officer. Miller; Good XXXX earnings today my Gabriella Skirnick, thank and here for Co-Chief joining David morning, Officer, Operating Officer;

our discussing And results hand to David our open turn call line results. describe the current then off David before before quarter begin by environment us I'll to the activity for take we to fourth we'll in overview providing portfolio Miller brief over through Pessah detail. to our financial market a call the finally, the Q&A. I'll it more of

get earnings net So to a $X.XX. quarter results. income strong fourth of recorded investment per with of our with quarter share We let's that,

equating acquisition the connection to merger was $X.XX accounting, impact with income share for with per book Excluding net yield value investment quarter net income adjusted in XX.X%. investment asset on the an the annualized of MMLC, of

quarter, of base increase returns quarter. last As reflection was in increase largely in case a is the the rates during the the

we per $X.XX as net ratio XXX% year. $X.XX which the share per equates For for in compared out a to share, to of income the coverage year, dividends investment fiscal adjusted paid

As dividends of record per totaling in yesterday, market as announced dividend we after closed $XX.XX company's with we Board XXXX. XXXX paid our excluding the a since the a the IPO, share XX, per This March shareholders $X.XX to special dividend, our consecutive post declared per the marks quarter of MMLC. of XXnd $X.XX payable share share merger

basis, lien junior to a versus current as of decreased more from value third Net third fair quarter. the end positioned XX.X% lien asset in potential December of the of of attributable well first share the as to quarter, loans are This XX.X% market the leaves a us assets as which in environment. On December headwinds XX, withstand primarily XX of X.X% unrealized of value per losses end share of decrease per was $XX.XX the to decrease positions. approximately non-first

secured In within addition, lien first emphasis we pipeline have senior investments. an sourcing on our

This add-on quarter, portfolio incumbent remained volumes relatively of on we as overall positions muted. focused activity, taking more advantage deal our

opportunities syndicated loans. We directly broadly and dedicated also private in for market to originated the continue to credit not remain secondary have participated

platform enhances that sponsors. companies key overall and sheet Goldman platform. the now was can platform GSBD, of our through to existing which the capabilities invest approval to alongside relief Lastly recent Sachs the origination as by credit additional credit believe this Sachs vehicles senior XXXX. This excited SEC benefit on we're particularly our in exemptive granted on Goldman further solutions private November that balance the note, a exemptive expands the relief XX, to enhance development provider We

over With Miller. me my that, David turn to let it co-CEO,

David Miller

Thanks, Alex.

we and M&A in companies to follow-on million million new new During investments portfolio investments to of $XX.X of activity. the X $XX.X primarily quarter, portfolio million companies, finance $XX.X commitments, investment to new originated X existing

investment secured Our loans. lien commitments first XXX% senior were in new

Sales totaled the portfolio by by $XXX.X full driven X activity primarily repayment and repayment investments million, of companies.

Turning to composition. portfolio

amount of XXXX, were X.X% unit first total our preferred X.X% including As and December debt fair in debt well at and second investments $X.X of tranche of portfolio as lien value, lien loans, XX.X% in XX.X% senior and in common a last-out X.X% in comprised of as and combination XX, warrants. a lien, billion secured small unsecured first stock

of XX, fair investments $XXX.X to commitments and of had unfunded December million at commitments bringing value total also as billion. We $X.X

company the at companies to X.X% prior amortized of QX weighted at the the industries. investments QX. end of income-producing XXX cost yield QX investments at to average was as The cost end, at yield debt XX.X% the our portfolio investment and weighted our across quarter XX.X% of different average from end the of in compared operating quarter. portfolio The As end of total at held XX XX.X% from increased of

to due is basis. to last regard companies the across This top growth and a our decline space in at which Turning the macro headwinds rates X.Xx had in line face. in net and both end line debt-to-EBITDA and portfolio ended had our quarter to companies year-over-year The average a from portfolio credit for questions is seeing X.Xx the importantly, the leverage quarter higher at quarter-over-quarter December end is that the XX, in slight few in quarters, from with quarter. credit you the weighted uptick of over investment third some down had private of EBITDA response companies the have base of quality. XXXX, This to X.Xx we're on to

for was the as calendar volumes year. through slowed M&A QX muted activity Deal

more environment. have We for expect pick with a M&A to should dry provide the as current powder tailwind pipeline of macro activity. sponsors comfortable marginally up becoming record This and are amounts

to the our investment While banking funnel opportunity via we from perspective selective increasing in that activity on remain lender risk-adjusted and where muted, remain view we've return credit markets risk. for We seen orientation our insulated credit first deployment lean lien the with lenders. as set incumbent maintain credit a increased long-term and public by turbulent, a strategic private is thereby capital are strong

in weighted coverage LTM the then current X.Xx The investment the LTM on at portfolio the the companies quarter on X.Xx investment end to in note ratios ratio quarter. in portfolio to of was be important we X.Xx. It's our use prior metrics our of our rather average versus a based or our trailing the than Were quarter basis. companies would coverage interest calculation, that we coverage calculate

turning asset And quality. to finally,

X.X% total investment value portfolio of status the of at As and and X.X% amortized costs, investments December fair nonaccrual XX, to respectively. XXXX, on amounted

slight increase the attributable nonfirst Importantly, lien junior primarily to in nonaccruals X is position.

to walk our will turn call financial to David over I the through Pessah results. now

David Pessah

net We of billion, fourth Thank and and $X XXXX billion year outstanding ended fair of you, ended $X.X David. of quarter $X.X investments billion. debt with total the portfolio value assets at

debt-to-equity net above ended ratio slightly of X.XXx our which level Our from to decreased X.XXx. X.XXx target quarter, last is

remains the debt end, portfolio as repayments amount pick to and same of leverage our credit the in leverage this increase of we an M&A half metrics XX% principal facility. our expect of up unsecured outstanding total company's in secured activity under was debt come year. in available capacity the expected revolving back was targeted Our with $XXX.X quarter down million of At as

non-GAAP financial we reference These is a October in non-GAAP measures. amortization adjusted to easier the merger reminder, income with to measures also addition to the purchase financial statement, company's to results. XXXX GAAP as certain continuing our MMLC. make prior or financial intended compare our from to Before the discount results results measures, This to impact remove

due For from increase income of QX, GAAP after-tax in also million quarter. GAAP to by million, in investment quarter-over-quarter net increase and as net and income the NII in $XX.X was the respectively, primarily investment respectively, to $XX.X rates. The incentive $XX.X was $XX.X the adjusted million Moreover, limiting million, unrealized losses prior compared resulting benchmark policy to markdowns. enhanced our due was fees and

On income to as $X.XX, and respectively, investment income was $X.XX, last net and net quarter. investment adjusted was a basis, share $X.XX per compared $X.XX GAAP

inception. $XX per December approximately a believe to was continuous $XX.XX as XXXX, $X.XX $X.XX. million quarter. compared Net last which share basis, on or totaled since asset Our on XX, on during quarter income stability spillover dividend $XX.XX Distributions per value taxable provides consistent share our is we the

I'll that, Alex to back it turn closing With for remarks.

Alex Chi

our Thanks, David. In for on conclusion, call. thank us joining you all

in think credit the environment that confident further ahead on we may at platform ahead continue our GSBD focus the quarters we volatility, to While as private will the we are investment differentiated for portfolio. exhibit unique opportunities Sachs and provide attractive maintain Golden our

your and open We With line the let's Q&A. that, for time today. appreciate attention

Operator

this There time. are no at questions

Austin Neri

Look right. to you much your quarter. Thank All support. forward very for next

Alex Chi

you. Thank

Goldman Sachs BDC (GSBD) 24 Feb 232022 Q4 Earnings call transcript