Barings BDC, Inc.

At this time, I'd like to welcome everyone to the Barings BDC Inc. conference call for the quarter and year ended December 31st, 2025. All participants are in listen-only mode. A question and answer session will follow the company's formal remarks. If you'd like to be placed in the question queue, you may press star 1 at any time. Today's call is being recorded and a replay will be available approximately two hours after the conclusion of the call on the company's website at www. on the investor relations section. At this time, I'll turn the call over to Joe Mazzoli, Head of Investor Relations for Barings BDC.

Please note that this call may contain forward-looking statements that include statements regarding the company's goals, beliefs, strategies, future operating results, and cash flows. Although the company believes these statements are reasonable, actual results could differ materially from those projected in forward-looking statements. These statements are based on various underlying assumptions that are subject to numerous uncertainties and risks, including those disclosed under the sections titled Risk Factors and Forward-Looking Statements. In the company's annual report on Form 10-K for the fiscal year ended, December 31st, 2025, as filed with the Securities and Exchange Commission. Barings BDC undertakes no obligation to update or revise any forward-looking statements unless required by law. I will now turn the call over to Tom McDonald, Chief Executive Officer of Barings BDC.

Thanks, Joe, and good morning, everyone. On the call today, I'm joined by Barings BDC's President, Matt Freund, Chief Financial Officer Elizabeth Murray, Barings Head of Global Private Finance and BBDC Portfolio Manager Brian High. Before I discuss our quarterly and annual results, I'd like to take a moment to speak about the leadership transition that we recently implemented and my involvement with the BDC franchise going forward. As many of you know, I assume the role of CEO of Barings BDC effective January 1st. Prior to stepping into this position, I spent most of my career deeply rooted in fundamental credit research and underwriting, portfolio management, and investor alignment across multiple strategies within bearings. Having navigated multiple credit cycles and managed leveraged credit businesses for decades, I bring a perspective that reinforces my conviction in the strength and durability of our investment process, and importantly, in our continued ability to deliver value for our shareholders. What has been immediately clear in my early months is what I long believed to be true. Barings BDC benefits from a best-in-class direct origination platform focused on the core middle market. This differentiated sourcing capability paired with our disciplined underwriting and strong alignment with shareholders represents a powerful combination, one that positions us well to drive attractive long-term risk-adjusted returns. While I bring a fresh perspective, the strategy, process, and philosophy that define BBDC remain firmly intact. Our approach is working and my focus is on enhancing the processes that already operate effectively and complementing the strengths of an exceptional existing team. It is my intention to accelerate existing initiatives and implement additional initiatives, all with a clear focus on ultimately improving ROE. I've had the privilege of connecting with many of our stakeholders following the leadership transition and I look forward to continuing that dialogue in the weeks and months ahead. In the fourth quarter, BBDC delivered strong net investment income accompanied by excellent credit performance within the bearings originated portion of the portfolio. Origination activity across the platform during the fourth quarter reflected continued success in our core strategies. Net deployment was influenced by fund level leverage and the fourth quarter reflected a period of net repayments consistent with our prior guidance. A strong and highly diversified portfolio combined with a benign credit environment and our focus on top of the capital structure investments in middle market issuers has continued to serve our investors well. We focus on the core middle market given its lower leverage and stronger risk-adjusted returns, making it the most compelling segment for BBDC and our shareholders. In addition, our emphasis on sectors that perform resiliently across economic environments provides an additional level of stability to our portfolio. This combination of senior secured financing solutions, core middle market focus, defensive non-cyclical sectors, and a global footprint offers our investors strong relative value and a meaningful differentiation within the broader BDC landscape. BBDC's portfolio has performed largely as designed. Our defensive, diversified issuer base is built as an all-weather portfolio. We believe this approach serves investors well regardless of the broader macroeconomic conditions, which, as Matt will touch on momentarily, we feel are broadly favorable. At the same time, we are beginning to see increased dispersion across managers in the space. Our experience suggests that underwriting rigor often reveals itself over multi-year periods rather than quarters. As investors in private credit know, It can take three, four, or even five years for the portfolios to season and for credit performance to materialize. Importantly, we have avoided ARR loans, deeply cyclical issuers, and creative financing structures that appear to be presenting headwinds to the sector. As we continue through 2026 and into 2027, we are confident that BBDC will continue to demonstrate the merits of rigorous credit underwriting, fundamental credit analysis, and a long-term a long track record within the asset class. Turning to our results, net asset per value was $11.09 per share, substantially unchanged from the prior quarter. Net investment income for the quarter was $0.27 per share compared to $0.32 per share in the prior quarter. These results reflect continued strength in Barings' originated investments, ongoing credit stability, and disciplined capital allocations. Now digging a bit deeper into the portfolio, we continue to actively maximize the value in legacy holdings acquired from MVC Capital and Sierra. During the fourth quarter, we accelerated the rotation of the Sierra portfolio, exiting approximately $50 million of legacy positions on a combined basis between directly owned assets and assets held in the Sierra JV, as Elizabeth will comment on shortly. As of quarter end, Barings originated positions now make up 96% of the BBDC portfolio at fair value, up from 76% at the beginning of 2022. Turning to the earnings power of the portfolio, the weighted average yield at fair value was 9.6%, reflecting a slight reduction from the prior quarter due to a reduction in base rates. Our board declared a first quarter dividend of 26 cents per share consistent with the prior quarter. On an annualized basis, the dividend level equates to a 9.4% yield on our net asset value of $11.09. As Matt will cover momentarily, BBDC is well positioned to navigate the current market volatility and deliver consistent risk-adjusted returns in the quarters ahead. I'll now turn the call over to Matt.