Bain Capital Specialty Finance, Inc.

Good morning, ladies and gentlemen, and welcome to the Bain Capital Specialty Finance fourth quarter and fiscal year ended December 31, 2023 earnings conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. I would now like to turn the conference over to Catherine Schneider, Director and Investor Relations. Please go ahead.

Thank you, Jenny. Good morning, everyone, and welcome to the Bain Capital Specialty Finance fourth quarter and year-ended December 31st, 2023 conference call. Yesterday, after market closed, we issued our earnings press release and investor presentation of our quarterly and year-ended results, a copy of which are available on Bain Capital Specialty Finances 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-K 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'd like to turn the call over to our CEO, Michael Ewald.

Thanks, Catherine, and good morning to everyone, and thank you for joining us on our earnings call. I'm joined here today by Mike Boyle, our president, and our chief financial officer, Amit Joshi. Before we begin, I would like to welcome Amit. For those who may not have seen our announcement, Amit has been appointed as our new chief financial officer, effective January 1, 2024. He brings a wealth of accounting knowledge specifically within the private credit and BDC landscapes and has over two decades of finance and accounting experience. We're excited to have Amit join our management team. And I would be remiss if I didn't thank our predecessor CFO, Sally Dornis, for her many contributions to the company over the last eight years. Sally remains in place as a senior leader across the greater Bain Capital platform. Thank you, Sally. In terms of the agenda for the call, I'll start with an overview of our fourth quarter and 2023 full year results, and then provide some thoughts on our performance, the overall market environment, and our positioning. Thereafter, Mike and Amit will discuss our investment portfolio and financial results in greater detail. So first, yesterday after market close, we delivered strong fourth quarter and full year 2023 results. Q4 net investment income per share was $0.54, representing an annualized yield on book value of 12.3%. Our net investment income covered our dividend by 129% during the quarter. Q4 earnings per share were $0.48, reflecting an annualized return on book value of 10.9%. For the full year 2023, net investment income per share was $2.19, equal to a 12.6% return on equity. This was up 60 cents per share, or 38% year over year. Our NII covered our dividend by 137% during the year. 2023 earnings per share were $1.91, representing a total return on equity of 11.4%. our annual net earnings continued to exceed our dividend payout for a third consecutive year, demonstrating our consistently strong credit performance. Our results were driven by high-quality interest income earned from our middle market borrowers and stable credit performance across our portfolio during the fourth quarter and throughout the year. Our net asset value ended the year at $17.60 per share, up from $17.54 from the previous quarter and up from $17.29 as of Q4 2022. reflecting the underlying portfolio strength. In addition, total dividends to our shareholders were $1.60 per share for 2023, reflecting a 16% increase from 2022 dividends. Subsequent to quarter end, our board declared a first quarter dividend equal to 42 cents per share and payable to record date holders as of March 28th, 2024. As we have highlighted to our shareholders in prior calls, our management team alongside our board has been continuously evaluating paying out any additional dividends as we neared year end. In recognition of the strength of our 2023 earnings as demonstrated by the company's strong net investment income and continued growth in our excess undistributed earnings, our board has declared additional dividends to shareholders totaling 12 cents per share for 2024. We intend to pay these special dividends in installments of three cents per share each quarter throughout the year. Together with our declared regular and special dividend, our total dividend payout for the first quarter represents an attractive yield of 10.2% annualized on ending book value. At BCSF's current trading levels, our total Q1 dividend represents an 11.6% annualized yield. And we believe this is a compelling level for investors on both an absolute and relative value basis across the BDC sector. Over the course of 2023, our middle market borrowers across our diversified portfolio demonstrated resiliency against a macroeconomic backdrop of moderate inflation and stunted economic growth. Corporate fundamentals remain solid, with net debt to EBITDA across our borrowers declining to a median net leverage across our portfolio of 4.8 times at year end. The strong credit quality health of our portfolio is reflected both by the low non-accrual rate of 1% of the portfolio at fair value, and the small number of portfolio companies on our watch list, and only 5% of our portfolio at fair value merited a risk rating 3 or 4, our lowest ratings. We ended the fourth quarter at a net leverage ratio of 1.02 times, at the lower end of our target net leverage ratio between 1 and 1.25 times, providing us with ample dry powder to capitalize on new investments in the current environment. While middle market transaction volumes were lower throughout 2023, We believe future transaction growth from new LBO and M&A processes are expected to be higher in 2024, with a clearer macroeconomic outlook and increased clarity on the rate environment. Importantly, while much has been made in the press lately of the return of the broadly syndicated loan market and how it may portend a decline in private credit opportunities going forward, the public markets have never been a player in our core middle market segment of companies with $25 to $75 million of EBITDA, and we don't see that dynamic changing in the future. Bain Capital's global and long-standing presence in the middle market positions us well to source new investment opportunities from our broad and deep set of relationships while remaining highly selective. Furthermore, our platform incumbency advantage provides us with a sourcing, underwriting, and execution edge. As new deal flow volume has slowed over the past year, supporting existing portfolio companies has been an increased source of new investment activity across our platform as we've been providing add-on capital to existing portfolio companies, to allow them to grow and execute their business plans. I will now turn the call over to Mike Boyle, our president, to walk through our investment portfolio in greater detail. Mike.