Bain Capital Specialty Finance, Inc.

Please stand by. Your program is about to begin. Should you need audio assistance, you may press star then zero to speak with an audio coordinator. Good day and welcome to the Bain Capital Specialty Finance second quarter ended June 30th, 2025 earnings conference call. Currently, all phone lines are in a listen only mode. Later, there'll be an opportunity to ask questions during a question and answer session. You may register to ask a question at any time by pressing the star then one on your telephone keypad. Please be advised today's program is being recorded. It is now my pleasure to turn the program over to Catherine Schneider, Investor Relations. You may begin.

Thank you, Aaron. Good morning and welcome everyone to the Bain Capital Specialty Finance second quarter ended June 30th, 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 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 Finances seems no obligation to update any forward-looking statements at this time unless required to do so by law. Lastly, test performance does not guarantee future results. So with that, I'd like to turn the call over to our Chief Executive Officer, Michael Ewald.

Thanks, Catherine, and good morning to everyone. Thank you for joining us on our earnings call here today. I'm joined by Mike Boyle, our President, and our Chief Financial Officer, Amit Joshi. In terms of agenda for the call, we'll stick a little bit with past practice here. I'll start with an overview of second quarter results and then provide some thoughts on our performance, the current 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 yesterday after market close, we delivered solid second quarter results. Q2 net investment income per share was 47 cents, representing an annualized yield on book value of 10.7%. Notably, our net investment income continues to demonstrate strong dividend coverage for our shareholders, exceeding our regular dividend payout by 12%. Q2 earnings per share were $0.37, reflecting an annualized return on book value of 8.3%. Our results were driven by strong levels of interest income earned from our middle market borrowers and largely stable credit performance across our portfolio. Our net asset value per share was $17.56, down slightly $0.08 per share from the prior quarter end. Subsequent to quarter end, our board declared a third quarter dividend equal to 42 cents per share, payable to record date holders as of September 16, 2025. The board also declared an additional dividend of 3 cents per share for shareholders of record as of September 16, 2025, as we had 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. Turning to the market, we witnessed increased market volatility at the beginning of the second quarter as a result of higher tariffs that the market feared would lead to a lower economic growth backdrop in the U.S. This caused a temporary pause in new deal volume activities across the market as investors sought more clarity and then resumed to more normalized levels throughout the quarter, fueled by a greater market optimism. Against this backdrop, Bain Capital's private credit group navigated the challenging market conditions by sticking to our core competency and longstanding presence in the middle market. Our scale and longstanding presence in this segment of the market allowed us to source attractive investment opportunities for our investors, despite a lower level of broader M&A activity in the market. In fact, during Q2, BCSF's gross originations were $530 million, up 73% year over year. We remained selective in our underwriting approach and continued to favor middle market-sized companies within the core segment of the market. To source these new investment opportunities, we benefited from Bain Capital's platform advantage through our sourcing relationships that benefit from our deep industry expertise and that distinguishes our platform from other competing lenders, our incumbency advantage that allows us to remain active by supporting existing companies through add-on activities, and our broader private credit group platform that has flexible capital to invest across the capital structure, from which BCSF benefits to source a greater and wider set of investment opportunities. While the market environment remains competitive with spread compression continuing more broadly, we believe Bain Capital remains well positioned to navigate this dynamic. The weighted average spread of our new originations during Q2 was over 580 basis points, demonstrating our ability to drive alpha for our investors. Our disciplined capital base allows us to pick our spots in areas of the market that we find most attractive versus competing against other segments of the market that may exhibit greater spread compression and less favorable documentation terms. In doing so, this has allowed us to produce attractive levels of net investment income for our shareholders while remaining focused on protecting our downside. Credit quality and fundamentals continue to be healthy across our portfolio. Investments on non-accrual represent 1.7% and 0.6% at amortized cost and fair value, respectively, as of June 30th. We saw a slight uptick in non-accruals this quarter driven by one new name added. Our non-accrual rate, though, continues to be low relative to the broader BDC sector average based on first quarter results as we do not have full comparable Q2 data for our peers yet. Looking ahead, we know dividend coverage has been a recent topic on investor minds in light of tightening market spreads, the potential for a lower interest rate environment, and higher liability costs with low fixed rate debt structures maturing. We wanted to take a moment to discuss our performance and future levers of growth. First, we would remind our investors that we set our dividend policy at an attractive level for shareholders and at a rate that can be earned throughout multiple market environments. As a reminder, our regular dividend rate at book value is 9.5% annualized. In more recent periods, our NII dividend coverage has been strong, both in Q2 and thus far this year for the first half of 2025, at 112% and 115% respectively. Our level of spillover income differentiates us versus other BDCs with $1.43 per share of spillover income, which is equal to over three times our regular dividend level. We also have nearly 10 cents per share of undistributed income from our joint venture investments that can contribute to higher NII levels in the future, as we've been over-earning the distributions paid to BCSF through these entities in recent quarters. Bain Capital has also demonstrated consistently strong credit performance. While we exhibited a modest NAV decline this quarter, our annualized ROE for the first six months of 2025 is 9.4%, and approximately 11% in each of the prior two calendar years in 2024 and 2023. Taking all of this together, we have demonstrated attractive performance for our shareholders. Relative to where our current trading levels are versus book value, we believe our stock offers a compelling opportunity. At BCSF's current market price as of yesterday's close, our dividend yield, inclusive of our regular and special dividend, represents a 12.2% annualized yield. We believe this is an attractive level for investors on both an absolute and relative value basis across the BDC sector. I will now turn the call over to Mike Boyle, our president, to walk through our investment portfolio in greater detail.