Goldman Sachs BDC, Inc. (“GSBD” or the “Company”) (NYSE: GSBD)
today reported financial results for the first quarter ended March
31, 2020 and filed its Form 10-Q with the U.S. Securities and
Exchange Commission.
QUARTERLY HIGHLIGHTS
- Net investment income for the quarter ended March 31, 2020 was
$0.45 per share, equating to an annualized net investment income
yield on book value of 12.2%;
- The Company announced a second quarter dividend of $0.45 per
share payable to shareholders of record as of June 30, 2020;1
- Net asset value per share for the quarter ended March 31, 2020
decreased to $14.72 as compared to $16.75 as of December 31, 2019,
primarily reflecting credit spread widening resulting from the
COVID-19 pandemic;
- As of March 31, 2020, the Company had investments in 107
portfolio companies. All but one of our portfolio companies made
their expected interest payments during the quarter. The Company’s
investments on non-accrual status declined from 1.0% at fair value
as of December 31, 2019 to 0.1% at fair value as of March 31, 2020,
primarily due to the realization of the Company’s original
investment in MPI Products LLC which was previously on non-accrual
status;
- During the quarter, the Company favorably amended its senior
secured revolving credit facility agreement (the “Secured Revolving
Credit Facility”) to reduce the stated interest rate from LIBOR
plus 2.00% to LIBOR plus 1.875%, and to extend the final maturity
date from February 21, 2023 to February 25, 2025; 2
- On February 10, 2020, the Company closed a public offering of
$360.0 million aggregate principal amount of unsecured notes due
2025 (the “Notes”). The Notes bear interest at a fixed rate of
3.75%. The proceeds from the sale of Notes were used to partially
repay the Secured Revolving Credit Facility. As a result of the
sale of the Notes and partial repayment of the Secured Revolving
Credit Facility, the Company’s funding mix at the end of the
quarter was weighted toward unsecured debt with 56% of
approximately $917.8 million of debt outstanding as of March 31,
2020 in unsecured obligations and 44% in secured obligations;
- The Company does not have any debt scheduled to mature in the
near term. The next scheduled maturity is for the Company’s $155.0
million of unsecured convertible notes due in 2022. As of March 31,
2020, the Company had $392.3 million of availability under the
Secured Revolving Credit Facility;
- The Company was in compliance with all financial covenants
under its debt obligations as of March 31, 2020 and continues to be
in compliance through the present date;
- The Company had significant liquidity as of March 31, 2020,
with $86.4 million of cash and cash equivalents on its balance
sheet and approximately $392.3 million of availability under the
Secured Revolving Credit Facility. Unfunded investment commitments
were approximately $61.3 million. There have been no material
changes in the Company’s liquidity subsequent to quarter end and
through the present date;
- Subsequent to quarter-end, Moody’s reaffirmed the Company’s
investment grade (IG) rating of Baa3 and stable outlook. In
addition, Fitch affirmed the Company's IG rating of BBB- and
revised the rating outlook to negative from stable.
SELECTED FINANCIAL HIGHLIGHTS
(in $ millions, except per share data)
As of
March 31, 2020
As of
December 31, 2019
Investment portfolio, at fair value3
$1,422.7
$1,454.3
Total debt outstanding4
$917.8
$773.4
Net assets
$594.9
$676.1
Net asset value per share
$14.72
$16.75
Three Months Ended
March 31, 2020
Three Months Ended
December 31, 2019
Total investment income
$32.0
$35.5
Net investment income after taxes
$18.2
$19.4
Net increase in net assets resulting from
operations
$(63.8)
$8.9
Net investment income per share (basic and
diluted)
$0.45
$0.48
Earnings (loss) per share (basic and
diluted)
$(1.58)
$0.22
Regular distribution per share
$0.45
$0.45
INVESTMENT ACTIVITY3
During the three months ended March 31, 2020, new investment
commitments and fundings were $81.8 million and $95.6 million,
respectively, including net fundings of $20.5 million in unfunded
prior commitments. The new investment commitments were across four
new portfolio companies and three existing portfolio companies. New
investment commitments were comprised of 99% first lien debt
investments. The Company had sales and repayments of $46.6 million
primarily driven by the full repayment of investments in three
portfolio companies.
Summary of Investment Activity for the three months ended March
31, 2020:
New Investment
Commitments
Sales and Repayments
Investment Type
$ Millions
% of Total
$ Millions
% of Total
1st Lien/Senior Secured Debt
$80.7
98.7%
$46.6
99.9%
1st Lien/Last-Out Unitranche
—
—
0.0
0.1
2nd Lien/Senior Secured Debt
1.1
1.3
—
—
Unsecured Debt
—
—
—
—
Preferred Stock
—
—
—
—
Common Stock
—
—
—
—
Total
$81.8
100.0%
$46.6
100.0%
PORTFOLIO SUMMARY3
As of March 31, 2020, the Company’s investment portfolio had an
aggregate fair value of $1,422.7 million, comprised of investments
in 107 portfolio companies operating across 38 different
industries. The investment portfolio on a fair value basis was
comprised of 92.0% in senior secured debt investments (77.9% in
first lien debt (including 2.4% in first lien/last-out unitranche
debt) and 14.1% in second lien debt), 0.5% in unsecured debt, 3.8%
in preferred stock and 3.7% in common stock.
Summary of Investment Portfolio as of March 31, 2020:
Investments at Fair
Value
Investment Type
$ Millions
% of Total
1st Lien/Senior Secured Debt
$1,074.5
75.5%
1st Lien/Last-Out Unitranche
34.2
2.4%
2nd Lien/Senior Secured Debt
200.8
14.1%
Unsecured Debt
7.4
0.5%
Preferred Stock
53.8
3.8%
Common Stock
52.0
3.7%
Total
$1,422.7
100.0%
As of March 31, 2020, the weighted average yield measured at
amortized cost and fair value was 7.7% and 9.9%, as compared to
8.2% and 8.9%, as of December 31, 2019. The weighted average yield
of the Company’s total debt and income producing investments at
amortized cost and fair value was 8.5% and 10.7%, respectively,
versus 9.0% and 9.6%, respectively, as of December 31, 2019. The
decline in yields during the quarter was primarily attributable to
the decline in LIBOR.5
As of March 31, 2020, 98.5% of the Company’s debt investments on
a fair value basis bore interest at a floating rate.6
As of March 31, 2020, the weighted average net debt/EBITDA of
the companies in the Company’s investment portfolio was 5.6x versus
5.7x as of December 31, 2019. The weighted average interest
coverage of companies comprising interest-bearing investments in
the investment portfolio was 2.6x versus 2.4x as of December 31,
2019. The median EBITDA of the portfolio companies was $37.8
million as of March 31, 2020 versus $37.6 million as of December
31, 2019.7
As of March 31, 2020, investments on non-accrual status
represented 0.1% and 0.9% of the total investment portfolio at fair
value and amortized cost, respectively.
RESULTS OF OPERATIONS
Total investment income for the three months ended March 31,
2020 and December 31, 2019 was $32.0 million and $35.5 million,
respectively. The decrease in investment income was primarily
driven by a decrease in prepayment premiums, accelerated accretion
of upfront loan origination fees and unamortized discounts and exit
fees on certain investments. The $32.0 million of total investment
income was comprised of $31.3 million from interest income,
original issue discount accretion, payment-in-kind income and
dividend income, $0.4 million from prepayment-related income and
$0.3 million from other income.8
Net expenses before taxes for the three months ended March 31,
2020 and December 31, 2019 were $13.4 million and $15.6 million,
respectively. The $2.2 million decrease in expenses was primarily
driven by the absence of incentive fees this quarter due to the
mark down of the portfolio. The $13.4 million of net expenses
before taxes were comprised of $8.9 million of interest and other
debt expenses, $3.0 million of management fees, and $1.5 million of
other operating expenses.
Net investment income after taxes for the three months ended
March 31, 2020 was $18.2 million, or $0.45 per share, as compared
with $19.4 million, or $0.48 per share for the three months ended
December 31, 2019.
During the three months ended March 31, 2020, the Company had
net realized and unrealized gains (losses) of $(82.1) million.
Net increase in net assets resulting from operations for the
three months ended March 31, 2020 was $(63.8) million, or $(1.58)
per share.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2020, the Company had $917.8 million of total
principal amount of debt outstanding, comprised of $402.8 million
of outstanding borrowings under its Secured Revolving Credit
Facility, $155.0 million of convertible notes and $360.0 million of
unsecured notes. The combined weighted average interest rate on
debt outstanding was 3.80% for the three months ended March 31,
2020. As of March 31, 2020, the Company had $392.3 million of
availability under its Secured Revolving Credit Facility and $86.4
million in cash and cash equivalents.4,9
The Company’s ending net debt to equity leverage ratio was 1.40x
as of March 31, 2020, as compared to 1.13x as of December 31,
2019.10
CONFERENCE CALL
The Company will host an earnings conference call on Tuesday,
May 12, 2020 at 9:00 am Eastern Time. All interested parties are
invited to participate in the conference call by dialing (866)
884-8289; international callers should dial +1 (631) 485-4531;
conference ID 5170749. All participants are asked to dial in
approximately 10-15 minutes prior to the call, and reference
“Goldman Sachs BDC, Inc.” when prompted. For a slide presentation
that the Company may refer to on the earnings conference call,
please visit the Investor Resources section of the Company’s
website at www.goldmansachsbdc.com. The conference call will be
webcast simultaneously on the Company’s website. An archived replay
of the call will be available from approximately 12:00pm Eastern
Time on May 12, 2020 through June 12, 2020. To hear the replay,
participants should dial (855) 859-2056; international callers
should dial +1 (404) 537-3406; conference ID 5170749. An archived
replay will also be available on the Company’s webcast link located
on the Investor Resources section of the Company’s website.
Please direct any questions regarding the conference call to
Goldman Sachs BDC, Inc. Investor Relations, via e-mail, at
gsbdc-investor-relations@gs.com.
ENDNOTES
1 The $0.45 per share dividend is payable on July 15, 2020 to
stockholders of record as of June 30, 2020.
2 LIBOR: London Interbank Offered Rate.
3 The discussion of the investment portfolio of the Company
excludes its investment in a money market fund managed by an
affiliate of The Goldman Sachs Group, Inc. As of March 31, 2020,
the Company’s investment in the money market fund was $64.3
million.
4 Total debt outstanding excludes netting of debt issuance costs
of $9.7 million and $3.7 million, respectively, as of March 31,
2020 and December 31, 2019.
5 Computed based on the (a) annual actual interest rate or yield
earned plus amortization of fees and discounts on the performing
debt and other income producing investments as of the reporting
date, divided by (b) the total performing debt and other income
producing investments (excluding investments on non-accrual) at
amortized cost or fair value, respectively. This calculation
excludes exit fees that are receivable upon repayment of the
loan.
6 The fixed versus floating composition has been calculated as a
percentage of performing debt investments measured on a fair value
basis, including income producing stock investments and excludes
investments, if any, placed on non-accrual.
7 For a particular portfolio company, we calculate the level of
contractual indebtedness net of cash (“net debt”) owed by the
portfolio company and compare that amount to measures of cash flow
available to service the net debt. To calculate net debt, we
include debt that is both senior and pari passu to the tranche of
debt owned by us but exclude debt that is legally and contractually
subordinated in ranking to the debt owned by us. We believe this
calculation method assists in describing the risk of our portfolio
investments, as it takes into consideration contractual rights of
repayment of the tranche of debt owned by us relative to other
senior and junior creditors of a portfolio company. We typically
calculate cash flow available for debt service at a portfolio
company by taking net income before net interest expense, income
tax expense, depreciation and amortization (“EBITDA”) for the
trailing twelve month period. Weighted average net debt to EBITDA
is weighted based on the fair value of our debt investments and
excludes investments where net debt to EBITDA may not be the
appropriate measure of credit risk, such as cash collateralized
loans and investments that are underwritten and covenanted based on
recurring revenue.
For a particular portfolio company, we also calculate the level
of contractual interest expense owed by the portfolio company, and
compare that amount to EBITDA (“interest coverage ratio”). We
believe this calculation method assists in describing the risk of
our portfolio investments, as it takes into consideration
contractual interest obligations of the portfolio company. Weighted
average interest coverage is weighted based on the fair value of
our performing debt investments and excluding investments where
interest coverage may not be the appropriate measure of credit
risk, such as cash collateralized loans and investments that are
underwritten and covenanted based on recurring revenue.
Median EBITDA is based on our debt investments and excludes
investments where net debt to EBITDA may not be the appropriate
measure of credit risk, such as cash collateralized loans and
investments that are underwritten and covenanted based on recurring
revenue.
Portfolio company statistics are derived from the financial
statements most recently provided to us of each portfolio company
as of the reported end date. Statistics of the portfolio companies
have not been independently verified by us and may reflect a
normalized or adjusted amount. As of March 31, 2020 and December
31, 2019, investments where net debt to EBITDA may not be the
appropriate measure of credit risk represented 29.2% and 25.1%,
respectively, of total debt investments at fair value. Portfolio
company statistics have not been independently verified by us and
may reflect a normalized or adjusted amount.
8 Interest income excludes prepayment premiums, accelerated
accretion of upfront loan origination fees and unamortized
discounts. Prepayment related income includes prepayment premiums
and accelerated accretion of upfront loan origination fees and
unamortized discounts.
9 The Company’s Secured Revolving Credit Facility has debt
outstanding denominated in currencies other than U.S. Dollars
(“USD”). These balances have been converted to USD using applicable
foreign currency exchange rates as of March 31, 2020. As a result,
the revolving credit facility’s outstanding borrowings and the
available debt amounts may not sum to the total debt commitment
amount.
10 The ending net debt to equity leverage ratio excludes
unfunded commitments.
Goldman Sachs BDC,
Inc.
Consolidated Statements of
Assets and Liabilities
(in thousands, except share
and per share amounts)
March 31, 2020
(Unaudited)
December 31, 2019
Assets
Investments, at fair value
Non-controlled/non-affiliated investments
(cost of $1,382,391 and $1,338,268)
$
1,269,212
$
1,298,133
Non-controlled affiliated investments
(cost of $83,509 and $83,460)
86,422
82,580
Controlled affiliated investments (cost of
$85,092 and $88,119)
67,113
73,539
Investments in affiliated money market
fund (cost of $64,306 and $0)
64,306
—
Cash
22,047
9,409
Receivable for investments sold
6,648
93
Unrealized appreciation on foreign
currency forward contracts
114
32
Interest and dividends receivable from
non-controlled/affiliated investments and
non-controlled/non-affiliated investments
6,583
5,702
Deferred financing costs
8,950
4,427
Deferred offering costs
—
276
Other assets
2,079
1,084
Total assets
$
1,533,474
$
1,475,275
Liabilities
Debt (net of debt issuance costs of $9,726
and $3,680)
$
908,071
$
769,727
Interest and other debt expenses
payable
7,203
2,304
Management fees payable
3,006
3,653
Incentive fees payable
—
1,850
Distribution payable
18,181
18,165
Directors’ fees payable
139
—
Accrued offering costs
—
28
Accrued expenses and other liabilities
2,015
3,423
Total liabilities
$
938,615
$
799,150
Commitments and Contingencies
Net Assets
Preferred stock, par value $0.001 per
share (1,000,000 shares authorized, no shares issued and
outstanding)
$
—
$
—
Common stock, par value $0.001 per share
(200,000,000 shares authorized, 40,401,637 and 40,367,071 shares
issued and outstanding as of March 31, 2020 and December 31,
2019)
40
40
Paid-in capital in excess of par
778,827
778,132
Distributable earnings
(182,587
)
(100,626
)
Allocated income tax expense
(1,421
)
(1,421
)
TOTAL NET ASSETS
$
594,859
$
676,125
TOTAL LIABILITIES AND NET
ASSETS
$
1,533,474
$
1,475,275
Net asset value per share
$
14.72
$
16.75
Goldman Sachs BDC,
Inc.
Consolidated Statements of
Operations
(in thousands, except share
and per share amounts)
(Unaudited)
For the Three Months
Ended
March 31,
2020
March 31,
2019
Investment Income:
From non-controlled/non-affiliated
investments:
Interest income
$
29,515
$
31,569
Payment-in-kind
614
302
Other income
247
651
Total investment income from
non-controlled/non-affiliated investments
30,376
32,522
From non-controlled affiliated
investments:
Interest income
665
618
Payment-in-kind
190
369
Dividend income
5
32
Other income
5
11
Total investment income from
non-controlled affiliated investments
865
1,030
From controlled affiliated
investments:
Payment-in-kind
426
535
Interest income
305
—
Dividend income
—
2,450
Total investment income from controlled
affiliated investments
731
2,985
Total investment income
$
31,972
$
36,537
Expenses:
Interest and other debt expenses
$
8,894
$
8,453
Management fees
3,666
3,536
Incentive fees
—
493
Professional fees
714
642
Administration, custodian and transfer
agent fees
241
240
Directors’ fees
139
113
Other expenses
372
336
Total expenses
$
14,026
$
13,813
Fee waiver
(660
)
—
Net expenses
$
13,366
$
13,813
NET INVESTMENT INCOME BEFORE
TAXES
$
18,606
$
22,724
Income tax expense, including excise
tax
$
427
$
439
NET INVESTMENT INCOME AFTER
TAXES
$
18,179
$
22,285
Net realized and unrealized gains
(losses) on investment transactions:
Net realized gain (loss) from:
Non-controlled/non-affiliated
investments
$
(5,434
)
$
(24,722
)
Controlled affiliated investments
(4,704
)
—
Foreign currency forward contracts
28
18
Foreign currency transactions
5
(6
)
Net change in unrealized appreciation
(depreciation) from:
Non controlled/non-affiliated
investments
(73,044
)
7,206
Non-controlled affiliated investments
3,793
(2,756
)
Controlled affiliated investments
(3,399
)
(894
)
Foreign currency forward contracts
82
78
Foreign currency translations
615
802
Net realized and unrealized gains
(losses)
$
(82,058
)
$
(20,274
)
(Provision) benefit for taxes on
unrealized appreciation/depreciation on investments
99
204
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
$
(63,780
)
$
2,215
Weighted average shares outstanding
40,396,319
40,261,057
Net investment income per share (basic and
diluted)
$
0.45
$
0.55
Earnings (loss) per share (basic and
diluted)
$
(1.58
)
$
0.06
ABOUT GOLDMAN SACHS BDC, INC.
Goldman Sachs BDC, Inc. is a specialty finance company that has
elected to be regulated as a business development company under the
Investment Company Act of 1940. GSBD was formed by The Goldman
Sachs Group, Inc. (“Goldman Sachs”) to invest primarily in
middle-market companies in the United States, and is externally
managed by Goldman Sachs Asset Management, L.P., an SEC-registered
investment adviser and a wholly-owned subsidiary of Goldman Sachs.
GSBD seeks to generate current income and, to a lesser extent,
capital appreciation primarily through direct originations of
secured debt, including first lien, first lien/last-out unitranche
and second lien debt, and unsecured debt, including mezzanine debt,
as well as through select equity investments. For more information,
visit www.goldmansachsbdc.com. Information on the website is not
incorporated by reference into this press release and is provided
merely for convenience.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements that
involve substantial risks and uncertainties, including the impact
of COVID-19 on the business, future operating results, access to
capital and liquidity of the Company and its portfolio companies.
You can identify these statements by the use of forward-looking
terminology such as “may,” “will,” “should,” “expect,”
“anticipate,” “project,” “target,” “estimate,” “intend,”
“continue,” or “believe” or the negatives thereof or other
variations thereon or comparable terminology. You should read
statements that contain these words carefully because they discuss
our plans, strategies, prospects and expectations concerning our
business, operating results, financial condition and other similar
matters. These statements represent the Company’s belief regarding
future events that, by their nature, are uncertain and outside of
the Company’s control. Any forward-looking statement made by us in
this press release speaks only as of the date on which we make it.
Factors or events that could cause our actual results to differ,
possibly materially from our expectations, include, but are not
limited to, the risks, uncertainties and other factors we identify
in the sections entitled “Risk Factors” and “Cautionary Statement
Regarding Forward-Looking Statements” in filings we make with the
Securities and Exchange Commission, and it is not possible for us
to predict or identify all of them. We undertake no obligation to
update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200511005940/en/
Goldman Sachs BDC, Inc. Investor Contact: Florina Mendez,
917-343-7823 Media Contact: Patrick Scanlan, 212-902-6164
Goldman Sachs BDC (NYSE:GSBD)
Historical Stock Chart
From Mar 2024 to Apr 2024
Goldman Sachs BDC (NYSE:GSBD)
Historical Stock Chart
From Apr 2023 to Apr 2024