Business Development Corp of America
Business Development Corp of America — Shareholder Meeting (May 2018)
35 slides from Business Development Corp of America's shareholder meeting presentation, May 22, 2018
Slide 1: First Quarter 2018 Investor Presentation
First Quarter 2018 Investor Presentation
Slide 2: Disclosures
Disclosures 2 This presentation was prepared exclusively for the benefit and use of Business Development Corporation of America (“BDCA”) investors to whom it is directly addressed and delivered and does not carry any right of publication or disclosure, in whole or in part, to any other party. This p
Slide 3: Disclosures
Disclosures 3 AUM refers to the assets under management for funds and separately managed accounts managed by Providence Equity Partners L.L.C., Pr ovidence Equity Capital Markets L.L.C. (“PECM”), BDCA Adviser, Benefit Street and Merganser Capital Management, LLC (collectively, “Providence”). For pri
Slide 4: Today's Speakers
Today’s Speakers 4 Richard J. Byrne Chief Executive Officer and President of BDCA Richard Byrne is President of Benefit Street Partners and is based in our New York office . Mr . Byrne is also Chief Executive Officer and Chairman of Benefit Street Partners Realty Trust, Inc . Prior to joining BSP in
Slide 5: Table of Contents
5 Executive Summary Section I Overview of Adviser Section II Overview of BDCA Section III Regulatory Update & Strategic Initiatives Section IV Annual Shareholder Meeting Table of Contents
Slide 6: Executive Summary
6 Executive Summary Source: SEC filings as of 05/10/2018 Notes: PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. ANY INVESTMENT INVOLVES SIGNIFICANT RISK, INCLUDING LOSS OF THE ENTIRE INVESTMENT. • BDCA made $285.8 million in new investments in Q1 2018. • BDCA has invested approxima
Slide 7: Executive Summary: Investment Activity
7 ($ in millions, where applicable) Source: SEC filings as of 05/10/2018. Note: PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. ANY INVESTMENT INVOLVES SIGNIFICANT RISK, INCLUDING LOSS OF THE ENTIRE INVESTMENT . Note: New Investment Purchases include PIK for the period. Executive S
Slide 8: Executive Summary: Portfolio Capital Structure
Executive Summary 8 Source: SEC filings as of 05/10/2018; percentages based on fair value. BDCA’s portfolio capital structure is 81.4% in senior secured investments, the increase was driven by purchases of First Lien positions. 60.0% 65.0% 70.0% 75.0% 80.0% 85.0% Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2
Slide 9: Executive Summary: Financial Summary
9 Executive Summary ($ in thousands, where applicable) Source: SEC filings as of 05/10/2018. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. ANY INVESTMENT INVOLVES SIGNIFICANT RISK, INCLUDING LOSS OF THE ENTIRE INVESTMENT . 1 Net Asset Value represents Net asset value attributable
Slide 10: Section I - Overview of Adviser
10 Section I - Overview of Adviser
Slide 11: Overview of Adviser: Benefit Street Partners
11 Assets / Committed Capital Under Management $24 billion 1 Investment Record 10 years 2 Dedicated Investment Professionals 90+ investment professionals Offices New York, Charlotte, Houston, Providence Investment Strategies Private Debt /Opportunistic Credit Long - Short Credit Long - Only Credit C
Slide 12: Overview of Adviser: BSP Platform
Section I - Overview of Adviser: BSP Platform 12 Established , high - quality institutional infrastructure to support all credit activities Extensive networks and expertise across numerous sectors; Direct origination and research capabilities Seek to achieve downside protection through lien protecti
Slide 13: Direct Sourcing Model with Emphasis on Non-Competitive Lending
13 Direct Sourcing Model with Emphasis on Non - Competitive Lending ▪ Dedicated 22 - person private debt origination team focused on proprietary deal flow ▪ Access to additional investment professionals to bolster proprietary sourcing infrastructure ▪ Prioritize “strategic” non - competitive lending
Slide 14: Section II – Overview of BDCA
14 Section II – Overview of BDCA
Slide 15: Overview of BDCA: Investment Thesis
Section II – Overview of BDCA: Investment Thesis 15 ▪ Focused on lending to middle market businesses, primarily in the United States ▪ 3 primary objectives 1 : - Preserve and protect capital; - Provide monthly cash distributions; and - Generate capital appreciation, where possible Note: Views expres
Slide 16: Overview of BDCA: Portfolio Snapshot
Section II – Overview of BDCA: Portfolio Snapshot 16 Source: SEC filings as of 05/10/2018. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. ANY INVESTMENT INVOLVES SIGNIFICANT RISK, INCLUDING LOSS OF THE ENTIRE INVESTMENT . Notes: Views expressed are those of BSP. 1 Based on fair va
Slide 17: Overview of BDCA: Industry Diversification
Section II – Overview of BDCA: Industry Diversification 17 Source : SEC filings as of 05/10/2018. Industry % of Porfolio Diversified Investment Vehicles 9.9% Business Services 7.7% Health Care 7.2% Hotels, Restaurants & Leisure 6.5% Aerospace & Defense 6.2% Media 5.7% Diversified Telecommunication S
Slide 18: Overview of BDCA: Credit Quality
31 Section II – Overview of BDCA: Credit Quality 18 ($ in thousands, where applicable) Source: SEC filings as of 05/10/2018. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. ANY INVESTMENT INVOLVES SIGNIFICANT RISK, INCLUDING LOSS OF THE ENTIRE INVESTMENT . • Four portfolio company
Slide 19: Overview of BDCA: Net Asset Value Per Share
Section II – Overview of BDCA: Net Asset Value Per Share 19 Source: SEC filings as of 05/10/2018 PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. ANY INVESTMENT INVOLVES SIGNIFICANT RISK, INCLUDING LOSS OF THE ENTIRE INVESTMENT . Net Asset Value Per Share $8.86 $8.84 $8.58 $8.62 $8.
Slide 20: Overview of BDCA: Financing Sources
Section II – Overview of BDCA: Financing Sources Source: SEC filings as of 05/10/2018 and 8 - K filings through May 16, 2018. 20 Post 1Q18 Developments: • On April 3, 2018, BDCA, entered into an amendment to its revolving credit facility with Wells Fargo Bank, to, among other things, increase the ag
Slide 21: Overview of BDCA: Board and Management Team
31 Section II – Overview of BDCA: Board and Management Team* Richard J. Byrne Chief Executive Officer and President Richard J. Byrne Chief Executive Officer and President Ronald J. Kramer Independent Director Leslie D. Michelson Independent Director Randolph C. Read Independent Director Corinne D. P
Slide 22: Section III – Regulatory Update & Strategic Initiatives
22 Section III – Regulatory Update & Strategic Initiatives
Slide 23: BDC Regulatory Update
31 Section III – BDC Regulatory Update 23 Note: Views expressed are those of BSP. ▪ On March 23, 2018, the Consolidated Appropriations Act was signed into law, which included the Small Business Credit Availability Act. ▪ Most notably for BDCs, this legislation permits BDCs to decrease their asset co
Slide 24: Strategic Initiatives
31 Section III - Strategic Initiatives 24 Leverage BSP origination platform Optimize balance sheet Prudently invest capital Focus on governance Align dividend with earnings Conform with public company peers Stabilize net asset value Transparent investor communications Improve quality of earnings Att
Slide 25: Section IV – Annual Shareholder Meeting
25 Section IV – Annual Shareholder Meeting
Slide 26: Annual Shareholder Meeting: Proxy Overview
31 Section IV – Annual Shareholder Meeting Proxy Overview 26 Note: Views expressed are those of BSP. ▪ BDCA’s Board of Directors has fixed the close of business on April 2, 2018 as the record date for shareholders entitled to vote at the Annual Meeting. ▪ BDCA filed the Proxy Statement on April 10,
Slide 27: Annual Shareholder Meeting Proposals
31 Section IV – Annual Shareholder Meeting Proposals 27 Note: Views expressed are those of BSP. Annual Meeting of Stockholders 2 1 Elect two (2) directors for three - year terms expiring in 2021 and until their successors are duly elected and qualified. Authorize BDCA to sell or otherwise issue up t
Slide 28: Proposal 1: Elect Board of Directors
28 ▪ We believe the experience and backgrounds of all our directors make them well qualified to serve as members of our Board of Directors. ▪ The Board of Directors is responsible for monitoring and supervising the performance of our day - to - day operations. ▪ The Board of Directors has proposed t
Slide 29: Proposal 2: Issue Shares Below NAV Description
29 Description of Proposal ▪ We are requesting authorization to issue our shares at a price below BDCA’s then current NAV per share, subject to certain conditions: – The number of shares issued cannot exceed 25% of BDCA’s then outstanding shares immediately prior to each such sale – A majority of ou
Slide 30: Proposal 2: Issue Shares Below NAV Rationale
30 Section IV – Annual Shareholder Meeting Proposal 2: Issue Shares Below NAV Rationale ▪ BDCA has no immediate plans to sell any shares of its common stock at a price below NAV. ▪ We believe this proposal will provide flexibility to raise capital from institutional investors thus enhancing BDCA’s p
Slide 31: Proposal 2: BDCs Including Below-NAV Issuance Proposals
31 ▪ Both Listed and Non - Traded BDCs have included proposals to issue shares below NAV in their proxies including: – Apollo Investment – Ares Capital – Blackrock Capital – Capitala Finance – CM Finance – Corporate Capital Trust (KKR) – Fidus Investment – FS Investment (Blackstone / GSO) – Full Cir
Slide 32: Board Recommendation: Vote FOR Proposals 1 & 2
32 Proposal 1: Board Members • The Board of Directors recommends that the stockholders vote “FOR” the election of Richard J. Byrne and Lee S. Hillman , as members of the Board of Directors to serve until the 2021 election. Proposal 2: Issuing Additional Shares • The Board of Directors recommends a v
Slide 33: Voting Options
VOTING OPTIONS 33 MAIL : Stockholders may submit their votes by mail by completing, signing, dating and returning their proxy card in the pre - paid envelope sent in the Proxy Statement. PHONE : By calling (800) 690 - 6903 with your control number available. INTERNET : www.proxyvote.com/BDCA . Enter
Slide 34: Risk Factors
The following is a summary of risk factors for Business Development Corporation of America . Risk Factors 34 • You should not expect to be able to sell your shares regardless of how we perform . • If you are able to sell your shares, you will likely receive less than your purchase price . • Our advi
Slide 35: Investor Relations Contact
35 www.bdcofamerica.com ▪ For account information, including balances and the status of submitted paperwork, please call Investor Relations at (844) 785 - 4393 ▪ Financial Advisors may view client accounts, statements and tax forms at www.dstvision.com ▪ Shareholders may access their accounts at www
Business Development Corp of America — Shareholder Meeting (May 2018) on 6ix