Golub Capital BDC, Inc. · NASDAQ:GBDC
Golub Capital BDC — Q1 2023 Earnings Presentation
28 slides from Golub Capital BDC's earnings presentation, 2023
Slide 1: Golub Capital BDC, Inc. Earnings Presentation
GOLUB CAPITAL BDC, INC. EARNINGS PRESENTATION QUARTER ENDED DECEMBER 31, 2022
Slide 2: Disclaimer
Disclaimer Some of the statements in this presentation constitute forward-looking Such forward-looking statements may include statements preceded by, followed statements, which relate to future events or our future performance or financial by or that otherwise include the words “may,” “might,” “will
Slide 3: Summary of Financial Results
Summary of Financial Results 01
Slide 4: Summary of Financial Results vs. Prior Quarter
Summary of Financial Results vs. Prior Quarter Quarter Ended September 30, 2022 December 31, 2022 Net Investment Income Per Share Net investment income per share $0.32 $0.36 1 Amortization of purchase premium per share 0.01 0.01 Adjusted net investment income per share2 A $0.33 $0.37 Accrual (revers
Slide 5: GBDC Performance Drivers
GBDC Performance Drivers 0 W GOLUB CAPITAL
Slide 6: Drivers of GBDC's FQ1 2023 Earnings
Drivers of GBDC’s FQ1 2023 Earnings Key Themes from Quarter Ended December 31, 2022 Key GBDC-Specific Takeaways ■ Continued volatility in U.S. equity and fixed income ■ Record quarterly adjusted NII before accrual markets1 (reversal) for capital gain incentive fee of $0.37 per share ■ Golub Capital’
Slide 7: Unrealized Losses Drove a NAV Per Share Decrease from September 30, 2022
Unrealized Losses Drove a NAV Per Share Decrease from September 30, 2022 NAV Per Share Bridge $0.01 $0.36 ($0.33) $0.02 $14.89 ($0.23) ($0.01) $14.71 Adjusted NII: $0.371 Adjusted Net Realized & Unrealized Loss: ($0.22) September 30, Net Investment Reversal of Dividends Paid Net Realized Gain Net Ch
Slide 8: Spread Widening in Highest Rated Credits Primary Driver of Unrealized Depreciation
Spread Widening in Highest Rated Credits Has Been the Primary Driver of Unrealized Depreciation and NAV Decline Since 3/31/22... Drivers of Net Change in Unrealized Depreciation Per Share Weighted Average T9M Cumulative Net Price1 % of Change in Unrealized 3/31/22 % of T9M Category Primary Driver De
Slide 9: Embedded Loss Reserve Relative to Historical Credit Track Record
…Effectively Creating a Large Embedded “Loss Reserve” Relative to GBDC’s Historical Credit Track Record Cumulative Net Unrealized Depreciation on Investments vs. Additional Reference Metrics Peak GBDC Historical Net Realized Loss Rate 5.1% 0.3% ~2.8x Average rolling four-quarter GBDC net realized ga
Slide 10: Summary of Financial Results for the Quarter Ended December 31, 2022
Summary of Financial Results for the Quarter Ended December 31, 2022 03
Slide 11: Summary of Quarterly Results
Summary of Quarterly Results Quarter Ended December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Net Investment Income Per Share Net investment income per share $0.27 $0.25 $0.32 $0.32 $0.36 Amortization of purchase premium per share1 0.04 0.02 0.02 0.01 0.01 Adjusted n
Slide 12: Portfolio Highlights - New Originations
Portfolio Highlights - New Originations – Total investments at fair value increased by approximately 0.1%, or $5.6 million, during the three months ended December 31, 2022. Quarter Ended December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Select Portfolio Funds Roll D
Slide 13: Portfolio Highlights – Investment Mix
Portfolio Highlights – Investment Mix – The portfolio continues to be focused on first lien, senior secured loans to what we believe to be healthy, resilient middle market companies backed by strong, partnership-oriented private equity sponsors. Historical Investment Portfolio ($000) $6,000,000 $5,6
Slide 14: Portfolio Highlights – Portfolio Diversity as of December 31, 2022
Portfolio Highlights – Portfolio Diversity as of December 31, 2022 Investment Portfolio $5,452mm | 332 Investments | Average Size 0.3% Portfolio Composition by Seniority Diversification by Obligor Top 10 Investments 1% 5% 15% 9% First Lien Traditional Senior First Lien Top 25 94% One Stop Investment
Slide 15: Economic Analysis: Positioned for Higher Interest Rates
Portfolio Highlights – Economic Analysis: Positioned for Higher Interest Rates 12.0% 11.0% 10.5% 10.0% 9.2% 10.0% 9.0% 8.0% 7.9% 7.7% 7.7% 7.5% 8.0% 7.3% 8.4% 7.0% 7.5% 7.4% 7.2% 7.1% 6.1% 7.1% 6.9% 6.0% 5.5% 5.0% 5.1% 4.9% 5.0% 4.8% 5.0% 4.5% 4.5% 3.8% 4.0% 4.4% 3.0% 3.0% 3.7% 3.0% 2.8% 2.8% 2.8% 2
Slide 16: Portfolio Highlights - Positioned For Higher Interest Rates
Portfolio Highlights - Positioned For Higher Interest Rates Potential for meaningfully higher quarterly adjusted net investment income (“NII”) as loans continue to reset to higher base rates1 Approximate Adjusted NII per Share Impact With Increase in Base Rates +13% Increase $0.45 $0.42 $0.40 $0.37
Slide 17: Portfolio Highlights - Credit Quality
Portfolio Highlights - Credit Quality – Fundamental credit quality as of December 31, 2022 remained strong with nearly 90% of the investments in our portfolio having an Internal Performance Rating1 of 4 or higher as of December 31, 2022. – Non-accrual investments at December 31, 2022 as a percentage
Slide 18: Portfolio Highlights – Portfolio Ratings
Portfolio Highlights – Portfolio Ratings Internal Performance Ratings (% of Portfolio at Fair Value) At Fiscal Year End At Quarter End Rating 2018 2019 2020 2021 2022 December 31, 2022 5 6.4% 2.7% 6.1% 10.2% 4.6% 2.8% 4 81.6% 88.2% 72.8% 80.7% 86.8% 86.5% 3 11.0% 7.9% 19.7% 8.1% 7.3% 9.4% 2 1.0% 1.2
Slide 19: Quarterly Statements of Financial Condition
Quarterly Statements of Financial Condition As of December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 (Dollar amounts in 000s, except share and per share data) (unaudited) (unaudited) (unaudited) (audited) (unaudited) Assets Investments, at fair value $5,146,766 $5,42
Slide 20: Quarterly Operating Results
Quarterly Operating Results Quarter Ended December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 (Dollar amounts in 000s, except share and per share data) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Investment Income Interest income $92,336 $88,679 $97,56
Slide 21: Financial Performance Highlights
Financial Performance Highlights Quarterly Return on Equity and Quarterly Distributions (Last 5 Years) Regular Distribution Special Distribution Quarterly Return on Equity* 6.7% 4.0% 3.9% 3.8% 3.3% 2.4% 2.3% 1.9% 1.9% 2.0% 2.2% 2.1% 2.8% 2.4% 2.6% 1.6% 1.0% 0.6% 0.3% -10.5% $0.44 $0.46 $0.12 $0.13 $
Slide 22: Long History of Strong Shareholder Returns
Long History of Strong Shareholder Returns Investors in GBDC’s 2010 IPO have achieved a 9.2% IRR on NAV1 As of December 31, 2022 $31.28 $0.58 $15.99 $14.71 $14.63 Mar-17 Sep-18 Mar-20 Sep-21 Apr-10 Jun-11 Dec-12 Jun-14 Dec-15 Jun-17 Dec-18 Jun-20 Dec-21 Jun-10 Sep-11 Mar-13 Sep-14 Mar-16 Sep-17 Mar-
Slide 23: Liquidity and Investment Capacity
Liquidity and Investment Capacity Cash and Cash Equivalents – Unrestricted cash and cash equivalents and foreign currencies totaled $103.2 million as of December 31, 2022. – Restricted cash and cash equivalents totaled $62.8 million as of December 31, 2022. Restricted cash is held in our securitizat
Slide 24: Stable, Highly Flexible and Low-Cost Funding Structure
GBDC Has a Stable, Highly Flexible and Low-Cost Funding Structure GBDC Debt Capital Structure* Debt Outstanding Undrawn Funding Source Commitment Par Commitment Reinvestment Period Stated Maturity Interest Rate1 Securitizations: 2018 Debt Securitization $408,200 $408,200 $— January 20, 2023 January
Slide 25: Common Stock and Distribution Information
Common Stock and Distribution Information Common Stock Price Data1 Fiscal Year Ending September 30, 2022 High Low End of Period First Quarter $15.99 $14.86 $15.44 Second Quarter $16.10 $14.70 $15.21 Third Quarter $15.48 $12.67 $12.96 Fourth Quarter $14.35 $12.21 $12.39 Fiscal Year Ending September 3
Slide 26: Appendix: Endnotes
Appendix: Endnotes A GOLUB CAPITAL
Slide 27: Endnotes - Non-GAAP Financial Measures
Endnotes - Non-GAAP Financial Measures 1. On September 16, 2019, the Company completed its acquisition of GCIC. The merger was accounted for under the asset acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805-50, Business Combinations — Related Issues. U
Slide 28: Endnotes - Drivers of GBDC's FQ1 2023 Earnings
Endnotes - Drivers of GBDC’s FQ1 2023 Earnings 1. Year-to-date as of December 31, 2022, the S&P 500 returned -18.1% and the Bloomberg U.S. Aggregate Bond Index returned -13.0%. Quarter-to-date as of December 31, 2022, the S&P 500 returned 7.6% and the Bloomberg U.S. Aggregate Bond Index returned 1.9