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. First Quarter 2024 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 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, which can be found on the homepage of our website at www.goldmansaxbdc.com under the investor resources section, 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, May 8th, 2024, 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 first quarter 2024 earnings conference call. I'm here today with David Miller, our Co-Chief Executive Officer, Tucker Green, our Chief Operating Officer, and Stan Medeshevsky, our Chief Financial Officer. I'll begin the call by providing a brief overview of our first quarter results and then discuss the current market environment in more detail. I'll then turn the call over to David and Tucker to describe our portfolio activity and performance before handing it off to Stan to take us through our financial results. And then finally, we'll open the line for Q&A. With that, let's get to our first quarter results. Our net investment income per share for the quarter was $0.55. And net asset value per share was $14.55. a decrease of approximately 0.5% or 7 cents from the end of the fourth quarter. Our net investment income again exceeded our quarterly dividend, but the excess was offset by net realized and unrealized losses during the quarter, which led to the slight decrease in NAV. On a fair value basis, first lien loans represent 96.5% of our assets as of March 31st, which reflects our bias towards maintaining exposure to credits that are higher up in the capital structure. Consistent with prior quarters, all new investment commitments this quarter were to first lien credits. As we announced after the market closed yesterday, our board declared a second quarter dividend of $0.45 per share, payable to shareholders of record as of June 28, 2024. This marks the company's 37th consecutive quarter of a $0.45 per share dividend, totaling $16.65 per share since our IPO, excluding the special dividends we paid in 2021 following the merger with MMLC. Now with respect to broader market conditions, the syndicated loan market rebounded significantly in the first quarter, taking back share from direct lenders, namely in companies with larger enterprise values. we saw this trend on the large cap side of our private credit platform. However, we believe direct lenders will continue to find attractive opportunities to deploy capital where borrowers and their private equity sponsors value the certainty and flexibility that private credit provides. As an example of that dynamic, we served as the largest lead lender and administrative agent in a loan to EQT in connection with their acquisition of Zeus, a manufacturer of critical components in the medical and industrial end markets. USA Debusk is another example where our private credit platform was the lead lender and administrative agent. USA Debusk provides industrial cleaning and specialty services supporting routine maintenance and refurbishments at chemical plants, refining and renewable facilities and other industrial infrastructure. Given our ability to draw on the broader Goldman Sachs platform, including our investment bank, GSBD and the private credit platform are poised to benefit from the significant backlog of sponsor activity that's channeling through our M&A franchise, in addition to add-on or refinancing activity from existing portfolio companies. We remain confident that the $1.2 trillion of private equity dry powder and the pressure to return capital to LP investors will serve as a catalyst to restart what has been a relatively muted sponsor M&A market, And we're starting to see a significant pickup in activity in our pipeline. Despite a lower than normal deal environment a year ago, first quarter M&A volumes were up 34% year over year off of a 15-year low of sponsor activity in 2023. And we saw a good mix of public to private, sponsor to sponsor, and strategic acquisitions of portfolio companies, which also led to some nice harvests. pressure on sponsors and monetized portfolio companies from legacy vintages will only continue to benefit private credit. It's worth noting that while we're seeing continued spread compression from supply-demand dynamics, credit fundamentals have remained in line with our expectations, and recent originations are still exhibiting sensible overall leverage levels and low LTVs. Again, we remain committed to leveraging the broader private credit and Goldman Sachs platform for the benefit of GSBD shareholders in the quarters and years ahead. For that, let me turn it over to my co-CEO, David Miller.

Thanks, Alex. During the quarter, we originated $359.6 million in new investment commitments to seven new and 13 existing portfolio companies. Sales and repayment activity totaled $115.7 million. primarily driven by the full repayment of investments in four portfolio companies. In particular, as we continue to upgrade the quality of the portfolio, we are pleased with a full repayment of one junior lien and an exit of an equity position. Turning to portfolio composition, as of March 31st, 2024, total investments in our portfolio were 3.4 billion at fair value. comprised of 97.5% in senior secured loans, including 91.9% in first lien, 4.6% in first lien last out unit tranche, and 1% in second lien, as well as a negligible amount in unsecured debt and 1.9% in a combination of preferred and common stock and warrants. As of March 31st, 2024, the company held investments in 149 portfolio companies operating across 39 different industries. The weighted average yield of our investment portfolio at amortized cost at the end of the first quarter was 11.9% as compared to 11.8% from the prior quarter. The weighted average yield of our total debt and income producing investments at amortized cost at the end of the first quarter was 12.7% as compared to 12.6% at the end of Q4. I will now turn the call over to Tucker Green to discuss overall credit quality.