Goldman Sachs BDC, Inc.

Good morning. This is Erica, and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs BDC, Inc. First Quarter 2021 Earnings Conference Call. Please note that all participants will be in a listen-only mode until the end of the call when we open up the line for questions. Before we begin today's call, I would like to remind our listeners that today's remarks may include forward-looking statements. These statements represent the company's belief regarding future events that by their nature are uncertain and outside of the company's control. The company's actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements as a result of a number of factors, including those described from time to time in the company's SEC filings. This audio cast is copyrighted material of Goldman Sachs BDC, Inc., and may not be duplicated, reproduced, or rebroadcast without our consent. Yesterday after the market closed, the company issued an earnings press release and posted a supplemental earnings presentation, both of which can be found on the homepage of our website at www.goldmansaxbdc.com under the Investor Resources section. These documents should be reviewed in conjunction with the company's Form 10-Q and filed yesterday with the SEC. This conference call is being recorded today, Friday, May 7, 2021, for replay purposes. I'll now turn the conference over to Brendan McGovern, Chief Executive Officer of Goldman Sachs BDC.

Thank you, Erica. Good morning, everyone, and thank you for joining us for our first quarter earnings conference call. I'm joined on the call today by John Yoder, our Chief Operating Officer. and Joe DiMaria, our interim chief financial officer. I'll begin the call by providing an overview of our first quarter results, followed by a brief look back over the last year as we navigated the COVID-19 health crisis. I'll then give a discussion of the current state of the lending environment before turning it over to John Yoder to describe our portfolio activity in more detail. Finally, Joe will take us through our financial results in more detail before we open the line for Q&A. So with that, let's get to our first quarter results. Q1 net investment income per share was 57 cents on after-tax net investment income of $57.6 million. Excluding the impact of asset acquisition accounting in connection with the merger of MMLC, adjusted net investment income was 48 cents per share. Net asset value per share increased to $16 per share as of March 31st, an improvement of approximately 60 basis points from the end of the fourth quarter. The increase reflected continued improvement in underlying portfolio company performance, coupled with ongoing market spread tightening. As we announced after the market closed yesterday, our board declared a $0.45 per share dividend payable to shareholders of record as of June 30, 2021. Further, we paid the first of our three installments of $0.05 per share special dividends on March 15, 2021. The remaining two additional $0.05 per share special dividends will be made to shareholders of record as of May 14, 2021 and August 16, 2021, respectively. Suffice to say, the past year presented a unique and challenging backdrop for GSBD, as the social and economic toll from the COVID-19 health crisis weighed heavily on U.S. companies, particularly middle market companies that we target for our investment strategy. Despite this negative backdrop, GSBD has performed well. and we are pleased that our long-term shareholders have been rewarded along the way with stable income and dividends and a near full recovery in net asset value from the lows of Q1 2020. As we look back over the past year, we would note the following. First, asset quality has been strong, and our portfolio companies have exhibited remarkable durability during the pandemic. Despite the economic upheaval, only one GSBD portfolio company was placed on non-accrual over the last year, amounting to just 30 basis points of total assets. Our focus on companies in growing sectors of the economy with strong value propositions and non-discretionary demand drivers has served us well and will continue to be the cornerstone of our approach. In addition, we believe our balance sheet discipline and strong risk management culture was on full display during the crisis. Exiting Q1 of 2020, as the pandemic was unfolding, more than half of our liability structure was in termed-out unsecured bonds. The flexibility afforded by this structure ensured that our secured lenders remained significantly over-collateralized even as asset prices dropped during the early days of the pandemic. With the benefit of a strong capital base, we were able to execute on opportunities, including the merger with MMLC, which more than doubled the company's size and delivered significant deleveraging at a point in time when balance sheet strength was of paramount importance. This execution has enabled us to access capital at attractive terms from the unsecured market. While there may still be uncertainties regarding the pandemic and its impact, we are very pleased that the business has exhibited remarkable resiliency during this period. As we look forward, the reflation that has transpired on the back of the accommodative fiscal and monetary policy has led to a very strong capital markets backdrop. As we noted last quarter, repayment activity has picked up in recent months. and we see this trend continuing on the back of the strong M&A environment. The platform remains well positioned to capture and grow share in the middle market lending space, and we will remain disciplined on new opportunities, keeping a strong focus on quality.

With that, let me turn it over to John Yoder. All right. Thanks, Brendan. As Brendan mentioned, the strong capital markets environment during the quarter enabled the team to be active on the new origination front. Our new investment commitments remain focused on senior secured loans, and included both new and add-on opportunities to existing portfolio companies. During the quarter, we made 13 new investment commitments, four of which were to new portfolio companies and nine that were to existing portfolio companies. Together with fundings of previously unfunded commitments, total capital deployed was approximately $196 million. Sales and repayment activity totaled $254 million, in repayments driven by the full repayment of investments in 10 portfolio companies. One notable repayment resulted in the monetization of a loan that we made originally in December of 2018 and included an equity co-investment into a company called Wrike, a SaaS-based project management and cloud collaboration company which was acquired by a strategic in March of this year. The first lien loan repayment resulted in a 10.4% IRR and was augmented by a 3.3 times money multiple on the equity co-investment. Turning to portfolio composition, as of March 31, 2021, total investments in our portfolio were $3.202 billion at fair value, comprised of 96.8% in senior secured loans, including 78.1% in first lien, 4.3% in first lien last out unit tranche, and 14.4% in second lien debt, as well as a negligible amount in unsecured debt, and 3.2% in preferred and common stock. We also had $223.8 million of unfunded commitments as of March 31st, bringing total investments and commitments to $3,426,000,000. As of quarter end, the company had 118 portfolio companies operating across 38 different industries. The weighted average yield of our investment portfolio at cost at the end of the quarter was 8.4%, which was the same as at the end of the fourth quarter. The weighted average yield of our total debt and income-producing investments at cost increased to 8.8% at the end of the quarter, up from 8.7% at the end of the fourth quarter. Turning to credit quality, the underlying performance of our portfolio companies overall was stable quarter over quarter. The weighted average net debt to EBITDA of the companies in our portfolio was six times at quarter end, again, unchanged from the end of the fourth quarter. The weighted average interest coverage of the companies in our investment portfolio was up slightly to 2.5 times as compared to 2.6 times at the prior quarter. As of the end of the quarter, investments on non-accrual status were 0.3% and 0.7% of the total investment portfolio at fair value and amortized cost, respectively, which remained unchanged from the end of the fourth quarter. I'll now turn the call over to Joe to walk through our financial results.