Bain Capital Specialty Finance, Inc.

Please stand by. Your program is about to begin. Should you require operator assistance during today's program, please press star zero. Good day, everyone, and welcome to today's Bain Capital Specialty Finance Third Quarter Ended September 30, 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have an opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone keypad. Please note this call is being recorded and I will be standing by should you need any assistance. It is now my pleasure to turn today's program over to Catherine Schneider with Investor Relations.

Thank you, Brittany, and good morning, everyone, and welcome to the Bain Capital Specialty Finance third quarter-ended September 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 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 webcast are property of Bain Capital Specialty Finance and any authorized 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. Bank 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, and thanks to all of you for joining us here today 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 third quarter, end of September 30th, 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. And as usual, we'll also leave some time for questions at the end. So yesterday after market close, we delivered strong third quarter results. Q3 net investment income per share was 53 cents as we continued to benefit from high base interest rates across our portfolio. Our net investment income return represented an annualized yield of 11.9% on book value and covered our regular dividend by 126%. Q3 earnings per share were 51 cents or an annualized return on equity of 11.5% as credit fundamentals remained healthy across our portfolio. As of September 30th, our net asset value per share was $17.76, an increase of 0.3% from the prior quarter end. Subsequent to quarter end, our board declared a fourth quarter dividend equal to 42 cents per share and payable to record date holders as of December 31st, 2024. The board also declared an additional dividend of three cents per share for shareholders of record as of December 31st, as we'd previously announced back in January and February. This brings total dividends for the fourth quarter to 45 cents per share, or a 10.1% annualized rate on ending book value as of September 30th, which we believe represents an attractive yield for our shareholders. Turning now to the market environment, during the third quarter, we continued to see active deal flow with increased transaction levels, driven by both M&A and new LBO activity, as volumes returned to levels comparable to historical periods. Based on current market conditions, we would expect these trends to continue into 2025, supported by the large amount of private equity dry powder, pressures for private equity sponsors to return capital back to their investors, and a likely lower interest rate environment from the higher levels seen in recent years. Our private credit group's longstanding presence in the middle market, combined with our strong focus and expertise across myriad industries, enables us to generate an attractive deal pipeline while remaining highly selective in our investments. Gross originations during Q3 were $413 million, up 278% year-over-year, and approximately 35% from Q2 levels of $307 million. This quarter, our platform was particularly active providing capital to new platforms that we sourced from our sponsor relationships who value the specialized industry expertise that Bain Capital Credit brings as a source of differentiation versus other lenders. While the private credit market continues to experience significant growth as many private lenders have moved upmarket, We continue to see attractive opportunities to source and underwrite investment opportunities in the core middle market and serve as a value-added capital provider and business partner to growing businesses. We value this segment of the market given its stable size premium and insulation to large market volatility. Across our originations to new platforms during the third quarter, the median EBITDA of our borrowers was approximately $33 million, consistent with our core borrower EBITDA focus of between $25 and $75 million. Relative value remains attractive on new investments within this segment of the market. While we have seen some recent spread compression across the broader market this year, terms and structure continue to be attractive. The weighted average yield on Q3 investments to new companies was 10.7%, with a median leverage levels of 4.5 times on these new originations. We continue to place a heavy emphasis on investing in structures which benefit from strong lender controls through credit agreement documentation containing financial covenants, and having control positions among lender groups. 96% of our Q3 originations to new companies were structured with documentation containing financial covenants tied specifically to management's forecasts, and we have majority control positions in nearly 87% 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 tenets of our investing strategy. Moving on to credit quality, our portfolio companies continue to exhibit strong fundamental performance in the current market environment. Leverage statistics across our borrowers remain healthy at 4.8 times overall based on our portfolio company median levels. Interest coverage also remains solid across our portfolio at approximately 1.7 times a quarter end, despite continued elevated base rates. Investments on non-accrual remain low across the portfolio at just 1.1% of the total portfolio at fair value. 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 believe our strong track record of solid company performance is a testament to Bain Capital's disciplined and highly selective underwriting process. Lastly, at the end of the third quarter, our gross and net leverage ratios for BCSF were 1.14 times and 1.09 times respectively, which falls in the middle 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 environment. I will now turn the call over to Mike Boyle, our president, to walk through our investment portfolio in greater detail. Mike?