Goldman Sachs BDC, Inc.

Good morning. This is Austin Neary, a member of the investor relations team for Goldman Sachs BDC Inc. And I would like to welcome everyone to the Goldman Sachs BDC Inc. third quarter 2023 earnings conference call. Please note that all participants will be in listen only mode until the end of the call when we will 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 forelooking 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 forelooking 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.GoldmanSachsBDC.com under the Investor Resources section, and which include reconciliations of non-GAAP measures to the most directly comparable GAAP measures. These documents should be reviewed in conjunction with the company's quarterly report on Form 10-Q filed yesterday with the SEC. This conference call is being recorded today, Wednesday, November 8th, 2023, for replay purposes. I'll now turn the call over to Alex Chee, Co-Chief Executive Officer of Goldman Sachs BDC, Inc.

Thank you, Austin. Good morning, everyone, and thank you for joining us for our third quarter 2023 earnings conference call. I'm here today with David Miller, our Co-Chief Executive Officer, Tucker Green, our Chief Operating Officer, and David Pessa, our Chief Financial Officer. I'll begin the call by providing a brief overview of our third quarter results before discussing the current market environment in more detail. I'll then turn the call over to David Miller and Tucker Green to describe our portfolio activity and performance before handing it off to David Pessa to take us through our financial results. And then finally, we'll open the line for Q&A. So with that, let's get to our third quarter results. Our net investment income per share for the quarter was 67 cents, an increase of 13.6% over the prior quarter's 59 cents. Excluding the impact of asset acquisition accounting in connection with the merger with MMLC, adjusted net investment income for the quarter was 64 cents per share, equating to an annualized net investment income yield on book value of 17.5%. The increase in investment income during the quarter was primarily driven by an increase in repayments and related accretion of discounted positions. As we announced after the market closed yesterday, our board declared a $0.45 per share dividend payable to shareholders of record as of December 29, 2023. This marks the company's 35th consecutive quarter of a $0.45 per share dividend, totaling $15.75 per share since our IPO, excluding the special dividends we paid in 2021 post the merger with MMLC. Net asset value per share increased to $14.61 as of September 30, 2023, an increase of $0.02 from the end of the prior quarter. This was primarily attributable to the increase of net investment income, which was partially offset by an increase in unrealized losses for the quarter. On a fair value basis, first lien loans are 94.9% of the investment portfolio as of September 30, 2023, which speaks to our continued focus on maintaining a higher quality portfolio. Again this quarter, we continue to invest only in directly originated first lien senior secured debt with no participation in the secondary market for broadly syndicated loans. As our portfolio continues to evolve, we believe it's particularly important to proceed with an abundance of caution with new underwritings as the economic cycle evolves over the next few quarters, while base interest rates are expected to remain higher for longer. Thank you. Thank you. Thank you. Although recent macroeconomic and geopolitical headlines may delay the timing of current deal closings by a quarter or so, we believe our existing pipeline of new opportunities remains extremely robust, and we expect that 2024 will be an active year for private credit across the spectrum. Of note this quarter, GSBD was a lead lender in the refinancing of Rubrik, one of the first investments we made post-integration of the BDC platform with the broader Goldman Sachs private credit complex. Rubrik is a provider of data backup and recovery software for enterprise customers and is an existing GSBD borrower. The latest transaction also involved the partial financing of an acquisition, which keeps the company's pro forma capital structure at a very attractive loan to value. RV Media is another example of a new origination in the third quarter where the Goldman Sachs private credit platform was a lead lender and GSBD was able to participate in financing the buyout of the business by a new financial sponsor. GSBD stands to benefit from deploying into a more favorable vintage in high-quality credits. and where we are an incumbent, not only resetting economics to current market pricing, but setting covenants and documentation to align with our orientation towards downside risk management. With that, let me turn it over to my co-CEO, David Miller.

Thanks, Alex. During the quarter, we originated $168.2 million in new investment commitments to eight new and five existing portfolio companies. Sales and repayment activity totaled $257.4 million, primarily driven by the full repayment and exit of investments in seven portfolio companies. In particular, we are pleased with the full repayment of three junior lien positions, which will allow us to continue redeploying capital into new first lien-oriented opportunities while remaining well within our leverage targets. Turning to portfolio composition, as of September 30th, 2023, total investments in our portfolio were $3.4 billion at fair value, comprised of 97.5% senior security loans, including 91.3% in first lien, 3.6% in first lien last out unit tranche, and 2.6% in second lien debt. as well as a negligible amount in unsecured debt, and 2.2% in a combination of preferred and common stock and warrants. As of quarter end, the company held investments in 137 portfolio companies operating across 38 different industries. The weighted average yield of our investment portfolio at cost at the end of Q3 was 11.6%, as compared to 11.9% from the prior quarter. The weighted average yield of our total debt in income-producing investments at amortized cost remained at 12.6% at the end of Q3. I will now turn the call over to Tucker Green to discuss our overall credit quality.