Bain Capital Specialty Finance, Inc.

Please stand by. Your program is about to begin. Good day, everyone, and welcome to the Bain Capital Specialty Finance First Quarter Ended March 31, 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. You may register to ask questions by pressing the star and one on your telephone keypad. You may withdraw your question by pressing star two. 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 the conference over to Katherine Schneider, Investor Relations. Please go ahead.

Thanks, Nikki. Good morning and welcome to the Bain Capital Specialty Finance first quarter ended March 31st, 2025 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 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. 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, and thanks to all of you for joining us here on our earnings call. I'm also joined today by Mike Boyle, our president, and our chief financial officer, Amit Joshi. As usual, in terms of agenda for the call, I'll start with an overview of our first quarter results and then provide some thoughts on our performance, the current market environment, and positioning. Thereafter, Mike and Amit will discuss our investment portfolio and financial results. As usual, we'll also leave some time for questions at the end. So yesterday after we closed, we delivered on the first quarter results. Q1 net investment income per share was 50 cents, representing an book value of 11.3%. Our net investment income was well in excess of our regular dividend with 119% dividend coverage. Q1 earnings per share were 44 cents, reflecting an annualized return on book value of 10.0%. Our results were driven by high quality interest income earned from our middle market borrowers and stable credit performance across our portfolio. Our net asset value per share was $17.64, down one penny per share from the prior quarter end. Subsequent to quarter end, our board declared a second quarter dividend equal to 42 cents per share, payable to record date holders as of June 16th, 2025. The board also declared an additional dividend of 3 cents per share for shareholders of record as of June 16th, 2025, as we previously in February. The total dividends for the second quarter to 45 cents per share, or a 10.2% annualized return on ending value as of March 31st, which we believe represents an attractive yield for our shareholders. The market, The first quarter was a busy start to the year beginning in January, while volumes then trended throughout the quarter, increased volatility and uncertainty across the broader market. Middle market direct lending volumes continued to see compression and then high levels of competition, which were steepest across the upper end of the market. We're certainly not immune to increased competition within the core part of the market, although we seek to be disciplined capital providers when we underwrite new capital structures, price, The risk we take, the reward we receive. Q1, BCSF's gross originations were $277 million, down 31% year-over-year. We remained selective in our underwriting approach and continued to favor middle-market companies within the core part of the market. The median weighted average EBITDA of borrowers during the quarter were approximately $23 million and $3 million, respectively. The weighted average spread in our first lien originations was over 140 basis points. Many of the core tenants that we value in our direct strategy, such as higher spread volumes, stronger lender controls through credit documentation containing financial statements, and having majority control positions within a small lender group, are much more sustainable in this segment of the market. Notably, these are attributes that we believe are increasingly important during periods of greater volatility. So 97% of our Q1 originations to new companies were structured with documentation containing financial covenants tied to management's forecasts. Majority control positions in over 78% 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. Credit quality and fundamentals continue to be solid across our portfolio. Investments on non-accrual represented 1.4%, 0.7% in amortized cost and fair value, respectively, as of March 31st. For all liquidity, we draw $323 million of total available liquidity across undrawn capacity on our revolving creditability, cash, and net settled trades. We ended the first quarter at a net leverage ratio of 1.17 times, which falls within our target leverage ratio on a net basis of 1.0 to 1.25 times, and positions us well with ample dry powder in the current environment. Following the U.S. government's tariff announcements in early April, we performed a portfolio review to identify potential individual exposure to higher tariffs. While there is still uncertainty around the timing and height of eventual tariffs, given the fluid situation and ongoing developments, only a small portion of BCSS portfolio companies were estimated to have direct tariff exposure. This limited exposure to exogenous factors identified by our team aligns with various facets of our investment strategy, including a focus on the core middle market, asset light, high free cash flow businesses, domestic manufacturing, and favoring certain industries such as software, healthcare, business services, and financial services. Notably, our aerospace and defense investments are not expected to have high direct impacts from tariffs, as our exposure within this segment includes service providers and manufacturers with overwhelmingly domestic customer bases and supply chains. While it is still too early to assess longer-term impacts of tariffs on the broader economy, we remain focused on the potential downstream effects of these and other current administration policies that could drive inflation higher, lower economic growth, and lead to a potential recessionary environment. Bain Capital's private credit group has over 25 years of experience and is well equipped to navigate the current environment as our professionals have successfully navigated multiple market cycles and periods of disruptions in the past. And we remain focused on prudently managing our portfolio. I will now turn the call over to Mike Boyle, our president, to walk through our investment portfolio in greater detail.