Barings BDC Inc. (NYSE:BBDC) Q3 2020 Earnings Conference Call November 10, 2020 9:00 AM ET Company Participants Eric Lloyd - Chief Executive Officer Ian Fowler - President & Co-head of Global Private Finance Jonathan Bock - Chief Financial Officer Brian High - Barings Head of U.S. Special Situations & Co-Portfolio Manager Conference Call Participants Fin O'Shea - Wells Fargo Robert Dodd - Raymond James Ryan Lynch - KBW Casey Alexander - Compass Point Kyle Joseph - Jefferies Bryce Rowe - Robert W. Baird Oper ...

Financial Performance - Total investment income for the nine months ended September 30, 2020, was $51,148,504, a decrease from $57,245,553 for the same period in 2019, reflecting a decline in LIBOR and average portfolio size[251]. - Total operating expenses for the nine months ended September 30, 2020, were $29,365,140, down from $33,888,209 in 2019, indicating improved cost management[253]. - Net investment income for the nine months ended September 30, 2020, was $21,783,364, compared to $23,357,344 in 2019, showing a slight decline[251]. - The company reported net realized losses of $37,323,454 for the nine months ended September 30, 2020, compared to losses of $1,063,250 in the same period of 2019, indicating increased volatility in investment performance[251]. - Total investment income for the three months ended September 30, 2020, was $16,329,142, a decrease of 15.5% compared to $19,304,107 for the same period in 2019[252]. - Total operating expenses for the three months ended September 30, 2020, were $8,368,976, down 26.3% from $11,316,932 in the prior year[253]. - Net realized losses for the three months ended September 30, 2020, amounted to $20,506,085, compared to $983,499 in the same period of 2019[258]. - The decrease in investment income was primarily due to a reduction in LIBOR and the average size of the portfolio[252]. Investment Portfolio - As of September 30, 2020, the total value of the investment portfolio was $1,116.3 million, down from $1,173.6 million as of December 31, 2019[242]. - The investment portfolio consisted of 115 portfolio companies as of September 30, 2020, compared to 147 as of December 31, 2019[242]. - The company made 47 new investments totaling $263.9 million during the nine months ended September 30, 2020[245]. - The company sold $307.4 million of loans during the nine months ended September 30, 2020, recognizing a net realized loss of $36.4 million[245]. - The company had 15 loans repaid at par totaling $58.5 million during the nine months ended September 30, 2020[245]. - The company had no non-accrual assets as of September 30, 2020, and December 31, 2019, indicating strong credit quality in the loan portfolio[249]. - The company had investments in senior debt and 1st lien notes valued at $833.1 million, representing 75% of the total portfolio fair value as of September 30, 2020[244]. Debt and Financing - As of September 30, 2020, the company had U.S. dollar borrowings of $325.0 million under the February 2019 Credit Facility with a weighted average interest rate of 2.188%[275]. - The total fair value of the borrowings outstanding under the February 2019 Credit Facility was $463.7 million as of September 30, 2020[276]. - The company completed a term debt securitization of $449.3 million on May 9, 2019, which included $296.8 million of AAA(sf) Class A-1 Senior Secured Floating Rate 2019 Notes[277]. - The company issued $50.0 million in Series A senior unsecured notes due August 2025 with a fixed interest rate of 4.66% per year[282]. - The company repaid the 2019 Notes in full on October 15, 2020[292]. - The company is obligated to offer to repay the August 2025 Notes at par if certain change in control events occur[282]. - The total unused commitments to extend financing as of September 30, 2020, amounted to $134,303,981, an increase from $89,496,985 on December 31, 2019[316]. COVID-19 Impact - The COVID-19 pandemic may lead to financial distress for certain portfolio companies, potentially resulting in defaults and impairments on investments[225]. - The company cannot predict the full impact of the COVID-19 pandemic on its financial condition and results of operations in the future[229]. - The company is monitoring the impacts of the COVID-19 pandemic, which may adversely affect future net investment income and the fair value of portfolio investments[229]. - The company has been operating under a 100% remote-working model due to COVID-19, ensuring service levels to partners and clients are maintained[222]. Merger Agreement - The merger agreement with MVC Capital, Inc. includes a cash consideration of $0.39492 per share and an exchange ratio of 0.94024 shares of the company's common stock[236]. - The company anticipates the consummation of the first step of the merger with MVC Capital during the fourth quarter of fiscal year 2020[239]. - The merger agreement includes termination rights, with potential fees of approximately $2.94 million payable to the company under certain conditions[241]. - The merger agreement prohibits MVC from soliciting alternative transaction proposals without certain conditions being met[238]. - The total value of the consideration to be received by MVC stockholders is subject to adjustments based on various factors, including outstanding shares and tax dividends[236]. Valuation and Commitments - The company utilizes an Income Approach model for valuing its private debt investment portfolio, primarily consisting of middle-market senior secured loans with floating reference rates[311]. - The fair value of investments is determined using Level 3 inputs when quoted prices or other inputs from Level 1 and Level 2 are not available[301]. - The company engages an independent valuation firm to perform limited procedures for third-party valuation consulting services at the end of each fiscal quarter[305]. - The independent valuation firm performed procedures on 66 senior secured, middle-market investments, representing 100% of the total investments at fair value as of September 30, 2020[306]. - The company has committed to monitoring market interest rate changes, which could impact gross investment income due to a prolonged reduction in interest rates[228].

Table of Contents 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 June 30, 2020 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 numb ...

Investment Portfolio Performance - As of March 31, 2020, the weighted average yield on the syndicated senior secured loan portfolio was approximately 4.9%, while the middle-market senior secured private debt portfolio yielded about 6.4%[199]. - The overall weighted average yield on all outstanding investments, including equity and equity-linked investments, was approximately 5.3% as of March 31, 2020[199]. - The weighted average yield on the middle-market senior secured private debt portfolio was 7.9% as of March 31, 2020[199]. - The weighted average yield on investments decreased to 5.3% as of March 31, 2020, down from 6.1% as of March 31, 2019[227]. - The total value of the investment portfolio was $1,071.8 million as of March 31, 2020, down from $1,173.6 million as of December 31, 2019[217]. - The fair value of the total portfolio at the end of the period on March 31, 2020, was $1,071,753,340, down from $1,189,384,128 at the end of March 31, 2019, a decrease of 9.88%[226]. Impact of COVID-19 - The company experienced a significant reduction in net asset value as of March 31, 2020, primarily due to the COVID-19 pandemic, resulting in increased unrealized depreciation of the investment portfolio[207]. - The COVID-19 pandemic has adversely affected the operations of some portfolio companies, potentially leading to financial distress and defaults[205]. - The company may need to restructure investments in some portfolio companies due to the adverse effects of the COVID-19 pandemic, which could reduce interest payments received[206]. - The ongoing impact of COVID-19 on portfolio companies may materially affect future net investment income and the fair value of investments[262]. - The net unrealized depreciation on the company's current portfolio was driven by broad market moves totaling $82.6 million for liquid syndicated secured loans and structured products[235]. - The company continues to monitor the impacts of the COVID-19 pandemic on its financial condition and operations, with potential material adverse effects on future net investment income[212]. Financial Results - Total investment income for the three months ended March 31, 2020, was $18,679,598, compared to $18,339,758 for the same period in 2019, reflecting an increase of 1.85%[226]. - Net investment income decreased to $7,314,068 for the three months ended March 31, 2020, from $7,957,287 in the same period of 2019, a decline of 8.1%[226]. - Operating expenses increased to $11,365,530 for the three months ended March 31, 2020, from $10,382,471 in the same period of 2019, an increase of 9.5%[228]. - The company recorded net unrealized depreciation of $119,396,053 for the three months ended March 31, 2020, compared to net unrealized appreciation of $25,397,188 in the same period of 2019[235]. - Net realized losses totaled $302,372 for the three months ended March 31, 2020, compared to $129,775 for the same period in 2019[233]. Debt and Financing - Approximately $1,218.4 million of the company's debt portfolio investments bore interest at variable rates as of March 31, 2020, which are generally LIBOR-based[209]. - The company had borrowings of $48.2 million outstanding under the August 2018 Credit Facility as of March 31, 2020, with an interest rate of 1.812%[243]. - Under the February 2019 Credit Facility, the company had U.S. dollar borrowings of $225.0 million outstanding as of March 31, 2020, with a weighted average interest rate of 3.154%[246]. - The total fair value of borrowings under the February 2019 Credit Facility was $291.6 million as of March 31, 2020[247]. - The total commitments under the August 2018 Credit Facility were reduced from an initial $750.0 million to $150.0 million by January 21, 2020[242]. Investment Activity - During the three months ended March 31, 2020, the company purchased $27.9 million in syndicated senior secured loans and made new investments totaling $78.1 million in ten middle-market portfolio companies[219]. - The company made additional debt investments totaling $14.7 million in ten existing portfolio companies during the three months ended March 31, 2020[219]. - New investments made during the three months ended March 31, 2020, totaled $354,055,162, compared to $240,284,192 in the same period of 2019, an increase of 47.3%[226]. - The company completed a $449.3 million term debt securitization on May 9, 2019, through the issuance of various notes secured by a diversified portfolio of senior secured loans[248]. Shareholder Returns - The company intends to distribute at least 90% of its investment company taxable income (ICTI) to stockholders to maintain its RIC status[258]. - A quarterly distribution of $0.16 per share was declared on April 30, 2020, payable on June 17, 2020[263]. - The company is authorized to repurchase up to 5.0% of shares outstanding under the 2020 Share Repurchase Program if shares trade below NAV per share[254]. - During the three months ended March 31, 2020, Barings BDC repurchased a total of 661,981 shares at an average price of $7.23 per share[255]. Valuation and Compliance - The company is in compliance with asset coverage requirements under the 1940 Act as of March 31, 2020[209]. - The company utilizes an income approach model for valuing its private debt investment portfolio, which includes middle-market senior secured loans[280]. - The fair value of investments is determined using Level 3 inputs when quoted prices or other inputs from Level 1 and Level 2 are not available[270]. - The company has engaged an independent valuation firm to perform quarterly reviews of its middle-market investments[275]. - The company performs due diligence on independent pricing service providers to validate their methodologies and controls in the valuation process[279].

Barings BDC Inc (NYSE:BBDC) Q4 2019 Earnings Conference Call February 28, 2020 9:00 AM ET Company Participants Eric Lloyd - Chief Executive Officer Ian Fowler - President & Co-Head of Global Private Finance Tom McDonnell - Managing Director & Portfolio Manager of Barings Global High Yield Jonathan Bock - Chief Financial Officer Conference Call Participants Finian O'Shea - Wells Fargo Kyle Joseph - Jefferies Robert Dodd - Raymond James Casey Alexander - Compass Point Robert Brock - West Family Investments Op ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) (Address of principal executive of ices) þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 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 Barings BDC, Inc. | --- | --- | |----------------------------------------------------- ...