Bain Capital Specialty Finance, Inc.

Good morning and welcome to the Bain Capital Specialty Finance first quarter ending in March 31st, 2021 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, please press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Catherine Schneider, Director of Investor Relations. Please go ahead.

Thanks, Emily. Good morning, everyone, and welcome to the Bain Capital Specialty Finance first quarter-ended March 31, 2021 conference call. Yesterday, after market closed, we issued our earnings press release and investor presentation of our quarterly results, a copy of which is available on Bain Capital Specialty Finance's Investor Relations website. Following our remarks today, we will hold a question and answer session for analysts and investors. This call is being webcast and a replay will be available on our website. This call and the webcast are property of Bain Capital Specialty Finance and any unauthorized broadcast in any form is strictly prohibited. Any forward-looking statements made today do not guarantee future performance and actual results may differ materially. These statements are based on current management expectations, which include risks and uncertainties, which are identified in the risk factor section of our Form 10-Q that could cause actual results to differ materially from those indicated. Bain Capital Specialty Finance assumes no obligation to update any forward-looking statements at this time unless required to do so by law. Lastly, past performance does not guarantee future results. So with that, I'll turn the call over to our Chief Executive Officer, Michael Ewald.

Thanks, Catherine, and good morning all, and thank you for joining us on our earnings call. I'm joined today by Mike Boyle, our president, and our chief financial officer, Sally Dornis. I'll start with an overview of our first quarter ended March 31st, 2021 results, and then provide some thoughts on our investment performance, the overall market environment, as well as our positioning. Thereafter, Mike and Sally will discuss our investment portfolio, credit quality, and financial results in greater detail. As Catherine mentioned, yesterday after market closed, we delivered strong first quarter results to our shareholders. Q1 net investment income per share was $0.34, driven by solid net investment income earned by our portfolio investments. Our net investment income covered our dividend by 100%. Q1 earnings per share were $0.49, driven by net gains across our investment portfolio, largely driven by the continued improvement in the performance of our borrowers and broad-based spread tightening. Net asset value per share as of March 31st was $16.69, representing a 0.9% increase from our NAV as of December 31st. As we've observed improving credit metrics across our portfolio, we've been pleased to deliver a continued gradual recovery in our NAV per share to our shareholders. We also demonstrated improving credit metrics through our low non-accrual rates. In fact, as of March 31st, the company had no investments on non-accrual status. reflecting solid credit quality across our diversified loan portfolio. Subsequent to first quarter end, our board declared a second quarter dividend equal to 34 cents per share and payable to record date holders as of June 30th, 2021. This represents an 8.1% annualized yield on ending book value as of March 31st. On February 25th, we closed our joint venture partnership with Pantheon through the International Senior Loan Program, or ISLP. This program, as you may recall, is focused on investing in middle market direct lending opportunities across Europe and Australia. These are two markets in which Bain Capital Credit and its private credit group in particular has a longstanding presence and strong track record of investing as we have a global footprint with local teams focused on providing financing solutions to middle market companies. As we discussed with our shareholders at length during last quarter's earnings call, the ISLP provides BCSF with three key benefits. First, enhanced balance sheet flexibility to expand our global capabilities as non-U.S. dollar investments count against the 30% non-qualifying asset bucket. Second, higher portfolio yields to drive greater net investment income for our shareholders as we estimate BCSF's investment in ISLP will produce a low double-digit yield. And finally, greater capacity to continue to invest in new senior secured loan opportunities to drive net investment income accretion as BCSF contributed existing investments from its balance sheet to ISLP. While we are still early in our formation of the ISLP, we are very pleased to demonstrate progress in achieving higher portfolio yields to our shareholders as our overall yield increased by approximately 30 basis points quarter over quarter to 7.6% amortized cost. Our goal is to achieve at least an 8% portfolio yield as we've been focused on driving higher net investment income for our shareholders. Over time, we believe this can be attained in a number of ways, such as rotating out of lower yielding investments into higher yielding investments, as some of those loans repay, growing our interest in the ISLP if we continue to find attractive investment opportunities outside of North America, and identifying new middle market loan opportunities at attractive spread levels. Importantly, we seek to accomplish this by retaining a focus on first lien loans and remaining disciplined in our credit selection. Turning now to the market environment. During the first quarter, our private credit platform, including BCSF, was very active in terms of new investment activity. We witnessed the M&A market open back up in 2021, driven by a more constructive economic backdrop for private equity sponsors as they sought to accomplish add-on acquisitions for growth activities as well as find new platform investments. Our market tends to be reliant on M&A activity, given our focus on sponsor-backed lending. We believe our longstanding presence in this market, which has led to a large number of incumbency positions, is a significant competitive advantage for us as we continue to invest with existing companies, which we know well. Furthermore, our flexible capital base allows us to offer a full suite of solutions for borrowers. This often results in us investing with companies longer through different ownership and segments of the capital structure, depending on where we identify the best risk-adjusted return. We also saw a significant amount of new investment activity out of Europe this quarter as half of our new portfolio companies were sourced from our offices in London and Dublin. On the liability side, the institutional unsecured debt markets were also robust during the first quarter, driven by strong investor demand levels. In February, the company received an investment grade rating of BAA3 from Moody's, which enabled us to take advantage of issuing unsecured debt in a historically low interest rate environment. So in March, the company issued $300 million of 2.95% unsecured notes, maturing in March 26. We are very pleased with our execution level as a debut issuer in this market. We believe this was a reflection of our demonstrated credit performance across our diversified portfolio, largely consisting of first lien loans, as well as the broader Bain Capital platform, including the breadth of our resources, capabilities, and expertise which benefit the company. We believe this note's issuance fortifies our balance sheet, and we look forward to being an ongoing issuer in this market in the future. I will now turn the call over to Mike Boyle, our president, to walk through our investment portfolio in greater detail.