UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________________ Form 10-Q __________________________________________________________ (Mark One) ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 814-00733 ____ ...

Exhibit 99.1 BARINGS BDC, INC. REPORTS FIRST QUARTER 2024 RESULTS AND ANNOUNCES QUARTERLY CASH DIVIDEND OF $0.26 PER SHARE CHARLOTTE, N.C., May 7, 2024 - Barings BDC, Inc. (NYSE: BBDC) ("Barings BDC" or the "Company") today reported its financial and operating results for the first quarter of 2024 and announced that the Company's Board of Directors (the "Board") declared a quarterly cash dividend of $0.26 per share. | --- | --- | --- | --- | --- | |----------------------------------------------------------- ...

5 New Stocks Under $10 That Pay Incredible Ultra Yield Dividends Shutterstock / tech_BG While Most of Wall Street focuses on large and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. Many of the most significant public companies, especially the technology giants, trade at prices up to $1000 per share, while many are in the low to mid-hundreds. It’s hard to get decent share count leverage at those steep prices.Many investor ...

The Zacks SBIC & Commercial Finance industry will continue to benefit from favorable regulatory changes and decent demand for personalized financing solutions.However, gradual deterioration in asset quality because of prolonged high rates and economic slowdown will hurt industry players’ financials. Increased competition and portfolio companies’ difficulty in servicing debt are other major headwinds being faced by the industry. Yet, a few names, like Bain Capital Specialty Finance, Inc. (BCSF) , Barings BDC ...

Core Insights - The article highlights three under-$10 stocks with dividends that present solid investment opportunities, each with unique strategies and strengths in their respective industries Group 1: PennantPark (PNNT) - PennantPark's portfolio reached $1.2 billion, marking a 16% sequential increase, with $231 million deployed across 12 new and 32 existing portfolio companies in Q1 fiscal 2024 [2][3] - The company achieved an internal rate of return (IRR) of 26% and a multiple on invested capital of 2.1 times, while maintaining a weighted average yield of 11.9% on investments in Q1 [3][4] - PennantPark focuses on lending to growing middle-market companies in sectors with recession resilience, such as business services, healthcare, and technology, which enhances its credit risk management [4] Group 2: Nordic American Tankers (NAT) - Nordic American Tankers reported an average time charter equivalent (TCE) of $41.6K per day per ship for spot vessels in Q4 2023, indicating strong revenue generation capabilities [5][6] - The company benefits from operating in the Suezmax tanker segment, which allows it to secure premium charter rates due to high demand [6] - Daily operating costs per ship are approximately $9K, showcasing the company's operational efficiency and cost-effectiveness [7] Group 3: Barings (BBDC) - Barings' net asset value (NAV) per share increased from $11.05 in 2022 to $11.28 in 2023, reflecting a year-over-year growth of 2.1% [8][9] - The company has reduced its exposure to non-Barings-originated assets from 24% to 11% since early 2022, enhancing portfolio quality and minimizing potential losses [9][10] - Barings maintains a stable dividend policy, with a Q4 dividend of 26 cents per share, yielding 9.2% on NAV, supported by a defensible funding mix with over $1 billion in unsecured debt liabilities [10]

Barings BDC, Inc. (NYSE:BBDC) Q4 2023 Earnings Conference Call February 23, 2024 9:00 AM ET Company Participants Joe Mazzoli - Head of Investor Relations Eric Lloyd - Chief Executive Officer Ian Fowler - Co-Head of Global Private Finance and President Elizabeth Murray - Chief Financial Officer Matt Freund - Co-Portfolio Manager Bryan High - Co-Portfolio Managers Conference Call Participants Finian O’Shea - Wells Fargo Securities Kyle Joseph - Jefferies Robert Dodd - Raymond James Casey Alexander - Compass P ...

Barings BDC (BBDC) came out with quarterly earnings of $0.31 per share, beating the Zacks Consensus Estimate of $0.30 per share. This compares to earnings of $0.34 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 3.33%. A quarter ago, it was expected that this business development company would post earnings of $0.31 per share when it actually produced earnings of $0.31, delivering no surprise.Over the last four quarters, the c ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) Barings BDC is an externally managed BDC investing in senior secured private debt of U.S. middle-market companies, expanding its portfolio and operating with a 150% asset coverage ratio - The company operates as a closed-end, non-diversified investment company, electing to be treated as a Business Development Company (BDC) and a Regulated Investment Company (RIC) for tax purposes[7](index=7&type=chunk) - In 2018, the company transitioned to an externally managed model with Barings LLC as its investment adviser, changing its name from Triangle Capital Corporation to Barings BDC, Inc[9](index=9&type=chunk)[10](index=10&type=chunk) - Completed the acquisition of MVC Capital, Inc. on December 23, 2020, and Sierra Income Corporation on February 25, 2022, significantly expanding the investment portfolio[11](index=11&type=chunk)[16](index=16&type=chunk) - The company's investment objective is to generate current income by investing primarily in senior secured private debt in privately-held middle-market companies, targeting businesses with Adjusted EBITDA of **$10.0 million to $75.0 million**[22](index=22&type=chunk)[32](index=32&type=chunk) - Stockholders approved a reduced asset coverage ratio of **150%** in July 2018, allowing for increased leverage. As of December 31, 2023, the asset coverage ratio was **183.6%**[28](index=28&type=chunk) [Management Agreements](index=17&type=section&id=Management%20Agreements) Barings BDC is managed by Barings LLC, paying a 1.25% base management fee on gross assets and a two-part incentive fee, including an income-based portion with an 8.25% hurdle and a capital gains portion Advisory Fee Structure | Fee Type | Rate/Calculation | | :--- | :--- | | **Base Management Fee** | 1.25% annually on the average value of gross assets (excluding cash and cash equivalents) | | **Incentive Fee (Part 1: Income-Based)** | 20% of pre-incentive fee net investment income over a rolling 12-quarter period, subject to an 8.25% annualized hurdle rate on net assets and an incentive fee cap | | **Incentive Fee (Part 2: Capital Gains)** | 20% of cumulative aggregate realized capital gains over cumulative losses and unrealized depreciation since August 2, 2018, paid annually | - The income-based incentive fee is calculated based on performance over the current and preceding eleven calendar quarters (the "Trailing Twelve Quarters") and is subject to a total return cap based on net capital losses[87](index=87&type=chunk)[91](index=91&type=chunk) - Under the Administration Agreement, Barings provides necessary administrative services, and the company reimburses Barings for the costs and expenses incurred, which are negotiated and agreed upon quarterly[99](index=99&type=chunk)[100](index=100&type=chunk) [Regulation and Taxation](index=21&type=section&id=Regulation%20and%20Taxation) As a BDC, the company must invest 70% in qualifying assets and, as a RIC, distribute 90% of taxable income annually, using taxable subsidiaries for compliance - To qualify as a BDC, at least **70%** of total assets must be "qualifying assets," which are typically securities of private or small public U.S. companies[111](index=111&type=chunk)[113](index=113&type=chunk) - To maintain RIC tax status, the company must distribute at least **90%** of its investment company taxable income annually and meet specific income source and asset diversification tests[135](index=135&type=chunk)[138](index=138&type=chunk) - The company is subject to a **4%** nondeductible U.S. federal excise tax on certain undistributed income unless it distributes at least **98.0%** of its ordinary income and **98.2%** of its capital gain net income for the calendar year[136](index=136&type=chunk) - The company utilizes wholly-owned taxable subsidiaries to hold certain portfolio investments, such as those organized as pass-through entities, to ensure compliance with the RIC **90%** qualifying income test[104](index=104&type=chunk)[106](index=106&type=chunk)[140](index=140&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from management dependence, conflicts of interest, valuation uncertainty, market competition, fee structure incentives, regulatory compliance, economic downturns, and stock price volatility - **Business & Structural Risks:** The company is highly dependent on Barings' key personnel and their relationships. Potential conflicts of interest exist as Barings manages other funds. The advisory fee structure may incentivize riskier investments and increased leverage[167](index=167&type=chunk)[180](index=180&type=chunk)[193](index=193&type=chunk) - **Investment & Portfolio Risks:** A significant portion of the portfolio is in illiquid, privately held securities whose valuation is subjective and uncertain. Investments are risky and could result in losses. Economic downturns and inflation could adversely affect portfolio companies' ability to repay debt[173](index=173&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk) - **Leverage & Financing Risks:** The company's financing agreements contain covenants that, if breached, could accelerate repayment. Increased leverage magnifies risk, and changes in interest rates could adversely affect profitability and the cost of capital[209](index=209&type=chunk)[213](index=213&type=chunk)[221](index=221&type=chunk) - **Securities Risks:** Shares of BDCs frequently trade at a discount to their NAV. The market price of the company's securities may be volatile due to various factors, including market conditions and operating results[320](index=320&type=chunk)[325](index=325&type=chunk) - **Cybersecurity Risks:** Cyber incidents could disrupt operations, compromise confidential information, and damage business relationships, leading to financial losses and regulatory scrutiny[256](index=256&type=chunk)[257](index=257&type=chunk) [Cybersecurity](index=67&type=section&id=Item%201C.%20Cybersecurity) Cybersecurity risk management is handled by Barings' comprehensive program with Board oversight, and no material threats have been identified - The company relies on the cybersecurity program of its adviser, Barings, to manage risks from cyber threats. This program includes risk assessments, security measures, and ongoing monitoring[378](index=378&type=chunk)[379](index=379&type=chunk) - The Board of Directors provides oversight of cybersecurity matters and receives regular updates from the CCO and the Adviser's CISO[381](index=381&type=chunk) - As of the reporting period, the company has not identified any cybersecurity risks that it believes have materially affected or are reasonably likely to materially affect its business, operations, or financial condition[384](index=384&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=70&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) BBDC stock traded at a discount to NAV in 2022-2023, with **$1.02** per share distributions in 2023 and a **$30.0 million** share repurchase program authorized NAV and Stock Price Performance (2023) | Quarter | NAV per Share | High Closing Price | Low Closing Price | Discount at High | Discount at Low | | :--- | :--- | :--- | :--- | :--- | :--- | | Q1 2023 | $11.17 | $8.95 | $7.47 | (19.9)% | (33.1)% | | Q2 2023 | $11.34 | $8.01 | $7.19 | (29.4)% | (36.6)% | | Q3 2023 | $11.25 | $9.34 | $7.65 | (17.0)% | (32.0)% | | Q4 2023 | $11.28 | $9.39 | $8.58 | (16.8)% | (23.9)% | - For the fiscal year 2023, total distributions were **$1.02** per share, reported as **100%** ordinary income. For 2022, distributions were **$0.95** per share, also **100%** ordinary income[393](index=393&type=chunk) - A 12-month share repurchase program was authorized on February 23, 2023, allowing for the repurchase of up to **$30.0 million** of common stock at prices below NAV. During 2023, **1,849,096** shares were repurchased at an average price of **$7.99** per share[249](index=249&type=chunk)[497](index=497&type=chunk)[251](index=251&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=77&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net investment income increased to **$127.8 million** in 2023, driven by higher interest income, with a significant net increase in net assets due to unrealized appreciation and portfolio growth [Portfolio and Investment Activity](index=79&type=section&id=Portfolio%20and%20Investment%20Activity) The investment portfolio grew to **$2.49 billion** in 2023, primarily senior debt, with **$470.5 million** in new investments and a slight increase in non-accrual assets Portfolio Composition by Fair Value | Investment Type | Dec 31, 2023 (%) | Dec 31, 2022 (%) | | :--- | :--- | :--- | | Senior debt and 1st lien notes | 67% | 69% | | Subordinated debt and 2nd lien notes | 10% | 11% | | Structured products | 4% | 3% | | Equity shares | 15% | 12% | | Investments in joint ventures/PE fund | 4% | 5% | | **Total Fair Value** | **$2,488.7M** | **$2,448.9M** | - In 2023, investment activity included **$264.6 million** in **39** new investments and **$205.9 million** in existing portfolio companies. The company also experienced **$141.1 million** in loan repayments and **$106.2 million** in principal payments[437](index=437&type=chunk) - As of December 31, 2023, investments in four portfolio companies were on non-accrual status, representing **1.5%** of the portfolio's total fair value, compared to seven companies representing **1.0%** at the end of 2022[442](index=442&type=chunk) - The weighted average yield on outstanding debt investments (excluding non-accruals) increased to **10.5%** as of December 31, 2023, from **9.7%** as of December 31, 2022[434](index=434&type=chunk) [Results of Operations](index=82&type=section&id=Results%20of%20Operations) Total investment income rose to **$289.2 million** in 2023, with net investment income at **$127.8 million**, and a **$128.0 million** net increase in net assets driven by unrealized appreciation Comparison of Operating Results (Years ended Dec 31) | ($ in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | **Total investment income** | **$289,201** | **$219,129** | | Total interest income | $219,789 | $161,488 | | Total dividend income | $36,917 | $30,204 | | **Total operating expenses** | **$159,390** | **$102,862** | | Interest and financing fees | $84,711 | $56,865 | | Base management fee | $32,649 | $29,501 | | Incentive management fees | $32,046 | $6,579 | | **Net investment income after taxes** | **$127,804** | **$115,656** | | Net realized (losses) gains | ($62,750) | $12,861 | | Net unrealized appreciation (depreciation) | $62,624 | ($123,041) | | **Net increase in net assets** | **$127,999** | **$4,681** | - The increase in investment income was primarily due to a higher weighted average yield on the portfolio resulting from higher base rates[452](index=452&type=chunk) - The rise in operating expenses was mainly attributable to increased interest and financing fees from higher rates on the credit facility and a significant increase in performance-based incentive fees[454](index=454&type=chunk)[457](index=457&type=chunk) [Liquidity and Capital Resources](index=85&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity with **$70.5 million** cash and **$1.1 billion** credit facility, issuing **$300.0 million** in notes and authorizing a new **$30.0 million** share repurchase program - As of December 31, 2023, the company had **$70.5 million** in cash and foreign currencies. Total debt outstanding was approximately **$1.44 billion**[468](index=468&type=chunk)[416](index=416&type=chunk) - The primary source of liquidity is the **$1.1 billion** February 2019 Credit Facility, which had **$719.9 million** outstanding as of year-end 2023. The facility's revolving period was extended to February 2025[469](index=469&type=chunk)[474](index=474&type=chunk) - Subsequent to year-end, the company issued **$300.0 million** of **7.000%** senior unsecured notes due 2029 and authorized a new 12-month, **$30.0 million** share repurchase program commencing March 1, 2024[546](index=546&type=chunk)[547](index=547&type=chunk) - As of December 31, 2023, the company had **$305.9 million** in total unused commitments to extend financing to its portfolio companies[536](index=536&type=chunk)[542](index=542&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=102&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate sensitivity, with a **100 bps** rate increase impacting net income by **$11.6 million**, and foreign currency risk managed through local currency borrowing - The company's main market risk exposure is to interest rate volatility, which affects the income from its variable-rate assets and the cost of its variable-rate liabilities[527](index=527&type=chunk)[528](index=528&type=chunk) Interest Rate Sensitivity Analysis (as of Dec 31, 2023) | Basis Point Change | Annual Impact on Net Income (in thousands) | | :--- | :--- | | Up 300 bps | $34,880 | | Up 200 bps | $23,253 | | Up 100 bps | $11,627 | | Down 25 bps | ($2,906) | | Down 50 bps | ($5,813) | - The company manages foreign currency risk by borrowing in local currencies (Swedish krona, British pounds sterling, Euros) to fund investments denominated in those same currencies[535](index=535&type=chunk) [Controls and Procedures](index=103&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and KPMG LLP affirmed the effectiveness of disclosure controls and internal control over financial reporting as of December 31, 2023, with no material changes - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[552](index=552&type=chunk) - Based on the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2023. This assessment was audited by KPMG LLP, which concurred[554](index=554&type=chunk) - There were no changes in internal control over financial reporting during the fourth quarter of 2023 that materially affected, or are reasonably likely to materially affect, these controls[554](index=554&type=chunk) [Other Information](index=104&type=section&id=Item%209B.%20Other%20Information) The Board authorized a new **$30.0 million** share repurchase program for 2024, with estimated annual expenses totaling **12.9%** of net assets - On February 22, 2024, the Board authorized a new 12-month share repurchase program for up to **$30.0 million** of its outstanding common stock, effective March 1, 2024[557](index=557&type=chunk) Estimated Annual Expenses (as a % of Net Assets) | Expense Category | Percentage | | :--- | :--- | | Base management fee | 2.7% | | Incentive fees | 2.7% | | Interest payments on borrowed funds | 6.7% | | Other expenses | 0.8% | | **Total annual expenses** | **12.9%** | Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Principal Accountant Fees](index=108&type=section&id=Items%2010-14) Information on directors, executive officers, governance, compensation, and principal accountant fees is incorporated by reference from the 2024 Proxy Statement - Detailed information for Items 10 through 14 is incorporated by reference from the company's forthcoming 2024 Annual Meeting of Stockholders Proxy Statement[571](index=571&type=chunk)[572](index=572&type=chunk)[573](index=573&type=chunk)[574](index=574&type=chunk)[575](index=575&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=109&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements and exhibits, including KPMG's unqualified opinion on financials and internal controls, highlighting Level 3 investment valuation as a critical audit matter - The company's independent registered public accounting firm, KPMG LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2023[596](index=596&type=chunk) - KPMG identified the assessment of the fair value of Level 3 investments as a critical audit matter due to the high degree of subjective judgment and specialized skills required to evaluate assumptions like market yields and comparable company multiples[607](index=607&type=chunk)

Core Viewpoint - The article emphasizes the potential of generating passive income through investments in business development companies (BDCs) that offer substantial dividends, highlighting six specific BDC stocks that can collectively yield over $2,000 annually from a $15,000 investment [2][21]. Summary by Company - **Barings BDC Inc. (NYSE: BBDC)** - Investment of $2,500 yields an annual passive income of $295.00 with a dividend yield of 11.8% - Focuses on private middle-market companies across various industries including manufacturing, technology, and consumer services [4]. - **BlackRock TCP Capital Corp. (NASDAQ: TCPC)** - Investment of $2,500 yields an annual passive income of $385.00 with a dividend yield of 15.4% - Invests in diverse sectors such as communication services, healthcare, and biotechnology [7]. - **Fidus Investment Corp. (NASDAQ: FDUS)** - Investment of $2,500 yields an annual passive income of $385.00 with a dividend yield of 15.4% - Specializes in sectors like aerospace, healthcare, and IT services, with a consistent increase in dividends since September 2022 [10]. - **Runway Growth Finance Corp. (NASDAQ: RWAY)** - Investment of $2,500 yields an annual passive income of $335.00 with a dividend yield of 13.4% - Primarily invests in technology and life sciences sectors, maintaining dividends since its IPO in 2021 [13]. - **Saratoga Investment Corp. (NYSE: SAR)** - Investment of $2,500 yields an annual passive income of $312.50 with a dividend yield of 12.5% - Focuses on leveraged buyouts and growth financings across various industries, with dividends increasing since summer 2022 [16]. - **Trinity Capital Inc. (NASDAQ: TRIN)** - Investment of $2,500 yields an annual passive income of $360.00 with a dividend yield of 13.4% - Specializes in venture debt for growth-stage companies and has seen variable dividends since its IPO [19]. Total Investment Summary - A total investment of $15,000 across these six BDC stocks can generate an annual passive income of $2,072.50 [22].

Core Viewpoint - Barings BDC Inc. is currently undervalued with a 22% discount to net asset value, which is considered excessive given its strong dividend coverage and potential for future dividend increases [2][19] Group 1: Financial Performance - Barings BDC's net investment income increased by 21% year-over-year in Q3 2023, driven by rising interest rates [10] - The company raised its dividend twice in 2023, with a current quarterly payout of $0.26 per share, and has a payout ratio of 83% based on earnings of $1.21 per share [12][19] - Preliminary figures for Q4 2023 suggest a net investment income per share between $0.30 and $0.32, indicating a well-covered dividend payout ratio of 81-87% [14] Group 2: Portfolio Composition - At the end of Q3 2023, 67% of Barings BDC's investments were in First Liens, 7% in Second Liens, and 14% in Equity, with a total portfolio value of $2.52 billion [3] - The portfolio primarily includes investments in the Finance, Business, and Services industries, along with other sectors such as Healthcare and Aerospace [7] Group 3: Non-Accruals and Market Sentiment - Barings BDC's non-accrual ratio rose to 1.6% in Q3 2023 from 1.1% in Q4 2022, which has contributed to a negative market sentiment despite the overall good performance [8][16] - The increase in non-accruals has led to a perception of risk, but the actual performance metrics suggest that the situation is manageable and presents a potential buying opportunity [17][19] Group 4: Future Outlook - The company's floating-rate exposure means that its net investment income is closely tied to the central bank's interest rate decisions, with expectations of three rate cuts in 2024 [18] - Given the current discount to net asset value and the potential for dividend increases, Barings BDC is positioned for a positive re-rating if credit quality improves [19]