Bain Capital Specialty Finance, Inc.

Stand by, your program is about to begin. If you need audio assistance during today's program, please press star zero. Good day, everyone, and welcome to today's Bain Capital Specialty Finance second quarter and the June 30th, 2024 earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask a question during the question and answer session. You may register to ask a question anytime by pressing the star and one on your telephone keypad. You may withdraw yourself from the queue by pressing star and two. I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Ms. Catherine Schneider. Please go ahead.

Thank you, Marjorie. Good morning and welcome everyone to the Bain Capital Specialty Finance second quarter ended June 30th, 2024 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 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-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'd like to turn the call over to our CEO, Michael Ewald.

Thanks, Catherine, and good morning, everyone, and thank you for joining us here on our earnings call. I'm joined today by Mike Boyle, our president, and our chief financial officer, Amit Joshi. In terms of the agenda for the call, I'll start with an overview of our second quarter, ended June 30, 2024 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. As usual, we'll also leave some time for questions at the end. So starting with yesterday, after market closed, we delivered solid second quarter results. Q2 net investment income per share was 51 cents as we continued to benefit from high base rate interest rates across our portfolio. Our net investment income return represented an annualized yield of 11.6% on book value and covered our regular dividend by 121%. Q2 earnings per share were 45 cents or an annualized return on equity of 10.2%. as credit fundamentals remain healthy across our entire portfolio. As of June 30th, our net asset value per share was $17.70, unchanged from the prior quarter end. Subsequent to quarter end, our board declared a third quarter dividend equal to 42 cents per share, and payable to record date holders as of September 30th, 2024. The board also declared an additional dividend of three cents per share for shareholders of record as of June 30th, as we previously announced back in February. This brings total dividends for the third quarter to 45 cents per share, or a 10.2% annualized rate on ending book value as of June 30th, which we believe represents an attractive yield for our shareholders. Turning now to the market environment, we continue to see healthy transaction levels during the second quarter, driven by both refinancing and new LBO activity, although new deal activity still remains at lower levels relative to historical periods. In spite of this lower activity level for new M&A, we believe the private credit market remains well-positioned for future growth, given the large amount of private equity dry powder earmarked for new deal activity on the one hand and the mounting pressure for sponsors to return capital to investors through portfolio company sales on the other. Furthermore, market expectations for future rate cuts have increased in recent weeks on the back of softer economic data, which could continue to drive new activity levels into this year and into 2025 as well. Against this backdrop, Bain Capital's private credit group remained active in the middle market, sourcing new investment opportunities from our broad and deep set of relationships, while still remaining highly selective. Our gross originations during Q2 were $307 million, up 55% year-over-year, though down approximately 24% from Q1 levels of $403 million. During the quarter, we were active providing capital to new companies and add-on capital to existing portfolio companies to support their growth through our platform incumbency advantage. Our Q2 originations were split nearly half and half between new and existing borrowers. We continue to see attractive terms in the core middle market, which we define as companies with between $25 and $75 million of EBITDA, and where Bain Capital's platform has consistently invested over its 25-plus year history. Across our direct originations to new platforms during the second quarter, the median EBITDA of our borrowers was approximately $45 million. While we have seen some recent spread compression, terms and structure continue to be attractive with a weighted average yield of 11.6% and median leverage levels of 4.6 times on these new originations. We also remain focused on investing in debt structures that provide us with strong lender controls. 95% of our Q2 originations to new companies were structured with documentation containing financial covenants tied to management's forecasts, and we have majority control in nearly 80% of these debt tranches, allowing us to drive eventual outcomes at our discretion. These statistics are consistent with our broader portfolio, showing our continued focus on these core tenants. Moving on to credit quality, our portfolio companies continue to perform well in the current market environment. Investments on non-accrual status declined quarter over quarter and are below industry averages. Our non-accruals represented 1.2 and 1.0% at amortized cost and fair value respectively as of June 30th. Credit risk rating trends were also stable during the quarter with only a small percentage of our portfolio underperforming and on our watch list. We've been very pleased with the performance of our borrowers operating in a higher interest rate environment in recent years. and we believe this is a testament to Bain Capital's disciplined and highly selective underwriting process. Lastly, we also enhanced our capital position during the quarter by attracting new lenders to our platform. We increased the commitments under our secured revolving credit facility by nearly 30% and extended the maturity to mid-2029 from 2026. At the end of the second quarter, our gross and net leverage ratios were 1.03 times and 0.95 times, respectively. which are at the lower end of our target leverage ratio of 1.0 to 1.25 times, and position us well with ample dry powder to capitalize on new investment opportunities in the current market environment. I will now turn the call over to Mike Boyle, our president, to walk through our investment portfolio in greater detail. Mike.