Financial Performance - The company reported a significant increase in net asset value (NAV), reaching $1.2 billion, representing a 15% increase year-over-year[9]. - Total revenue for the year was $300 million, up 10% from the previous year, driven by strong performance in the investment portfolio[10]. - The company achieved a return on equity (ROE) of 12%, reflecting effective management of investment strategies[11]. - The company anticipates a 5% increase in dividend distributions for the upcoming quarter, reflecting confidence in cash flow stability[16]. - As of December 31, 2020, the company reported total assets of $2,603.5 million and outstanding indebtedness of $1,465.5 million, resulting in net assets of $1,068.0 million[151]. Investment Strategy - New investments totaled $150 million, with a focus on middle-market companies, which are expected to yield higher returns despite increased risks[12]. - The investment strategy includes a focus on risk-adjusted returns and current income through senior middle market lending opportunities[30]. - The company focuses on middle-market companies with annual EBITDA between $10.0 million and $150.0 million, primarily targeting senior investments[30]. - The company may invest up to 30% of its portfolio in non-qualifying investments, including non-U.S. companies[30]. - The company is required to maintain at least 70% of its total assets in qualifying assets to comply with BDC regulations, which may limit investment opportunities[185]. Debt and Financing - Debt financing arrangements have been secured, totaling $200 million, which will be used to leverage investment opportunities[15]. - The company has a maximum commitment amount under the BCSF Revolving Credit Facility of $500.0 million, which may be increased under certain conditions[79]. - The company completed a $501.0 million term debt securitization through the 2019-1 CLO Transaction, secured by a diversified portfolio of middle market loans[89]. - The company entered into a Revolving Advisor Loan with a maximum credit limit of $50.0 million, with no borrowings as of December 31, 2020[90]. - The company is required to maintain a coverage ratio of total assets to total borrowings of at least 150%, and failure to do so could limit its ability to incur additional debt[148]. Regulatory Compliance - The company is committed to maintaining compliance with SEC regulations, which may affect operational flexibility but is essential for long-term sustainability[12]. - The company is regulated as a Business Development Company (BDC) under the 1940 Act, allowing it to invest primarily in private companies[95]. - The company must distribute at least 90% of its investment company taxable income to qualify as a RIC, which includes net ordinary income and excess realized net short-term capital gains[119]. - The company is required to certify the accuracy of its consolidated financial statements as per the Sarbanes-Oxley Act, ensuring transparency and accountability in financial reporting[111]. - The company is subject to significant regulatory compliance costs, which could adversely affect investment value if any portfolio company fails to comply with applicable laws[161]. Risk Factors - The management highlighted potential risks related to rising interest rates, which could impact portfolio company performance and repayment capabilities[11]. - The company faces competition from larger public and private funds, commercial banks, and private equity firms, which may have access to funding sources not available to the company[37]. - The company may face challenges in obtaining adequate information to evaluate potential returns from investments in middle market companies not subject to public reporting requirements[134]. - The company may need to restructure the capitalization of some portfolio companies, potentially resulting in reduced interest payments or permanent impairments on investments[195]. - The company may face adverse effects on net investment income and distributions if LIBOR is replaced by a rate that does not gain market acceptance[154]. Management and Fees - The base management fee is set at an annual rate of 1.5% of gross assets, with a tiered structure reducing the fee to 1.0% for assets that decrease the asset coverage ratio below 200%[39]. - The incentive fee structure includes a component based on income and capital gains, with a hurdle rate of 1.5% per quarter (6% annualized)[40]. - The management fee is set at 0.375%, with other expenses totaling 0.1525% impacting the pre-incentive fee net investment income calculations[46]. - The Advisor employs a detailed investment decision process that includes sourcing, diligence, credit committee approval, and ongoing portfolio management[23]. - The management and incentive fee structure may create misaligned incentives for the Advisor, potentially leading to speculative investments[139]. Market Conditions - The COVID-19 pandemic has caused ongoing disruptions in global debt and equity markets, impacting the company's operations[188]. - The Federal Reserve's interest rate adjustments, including cuts to near zero in response to COVID-19, may lead to volatile interest rates impacting access to debt markets[197]. - Increased market volatility and liquidity issues are anticipated due to government and central bank policies, which may negatively impact credit markets[194]. - The company has limited exposure to cyclical industries currently experiencing significant distress, such as energy and hospitality, focusing instead on defensive sectors like technology and healthcare[194]. - The company is monitoring the impact of current events and market conditions on its portfolio companies, which may influence operational results[194]. Portfolio Management - The Advisor monitors portfolio companies regularly, assessing adherence to business plans and compliance with covenants, with a focus on financial trends and performance ratings[32]. - The company actively monitors investments, reviewing financial performance at least quarterly[104]. - The company may need to sell investments at disadvantageous prices to meet payment obligations if it defaults on debt agreements[148]. - The company faces uncertainty in the valuation of its portfolio investments, as many are not publicly traded and lack market-based price quotations[141]. - The company’s net asset value (NAV) could be adversely affected if fair value determinations are materially higher than realized values upon asset disposal[158].

Bain Capital Specialty Finance, Inc. (NYSE:BCSF) Q3 2020 Earnings Conference Call November 6, 2020 8:30 AM ET Company Participants Katherine Schneider – Investor Relations Michael Ewald – President and Chief Executive Officer Mike Boyle – Vice President and Treasurer Sally Dornaus – Chief Financial Officer Conference Call Participants Finian O’Shea – Wells Fargo Securities Ryan Lynch – KBW Derek Hewett – Bank of America Operator Good morning, and welcome to the Bain Capital Specialty Finance Third Quarter 2 ...

Financial Data and Key Metrics Changes - Net investment income for Q2 2020 was $0.37 per share, compared to $0.44 per share in Q1 2020, reflecting a decrease in overall performance [13][32] - Total investment income decreased to $47.9 million from $51.5 million in the previous quarter, primarily due to a decline in interest income driven by lower LIBOR rates [30][32] - Net asset value (NAV) per share remained flat at $15.81, with a slight dilution impact from the rights offering [14][34] Business Line Data and Key Metrics Changes - New investment fundings totaled $49 million across 16 portfolio companies, while sales and repayments amounted to $67 million, indicating a decrease in activity compared to previous quarters [19][20] - The fair value of the investment portfolio was $2.5 billion, unchanged from the prior quarter, with 88% of the portfolio invested in first lien debt [21][30] Market Data and Key Metrics Changes - The portfolio is geographically diverse, with 83% of investments in the U.S. and 17% outside, showing resilience in performance across different regions [25][26] - The weighted average portfolio yield at amortized cost decreased to 6.6% from 7.3% due to significant declines in LIBOR rates [24] Company Strategy and Development Direction - The company emphasizes capital preservation and a disciplined investment approach, focusing on first lien senior secured floating rate assets [9][12] - The management plans to capitalize on attractive investment opportunities arising from market volatility and dislocation [12][38] Management's Comments on Operating Environment and Future Outlook - The management expressed cautious optimism regarding portfolio performance, attributing better-than-expected results to proactive cost-cutting measures by portfolio companies [8][15] - The company remains vigilant about potential challenges in the middle market and sectors heavily impacted by COVID-19 [9][17] Other Important Information - The company completed a transferable rights offering, raising approximately $132 million to strengthen its balance sheet and reduce net leverage ratio to 1.4x [10][34] - The company issued $150 million in unsecured debt at an 8.5% interest rate to enhance financial flexibility, despite the higher cost of capital [11][36] Q&A Session Summary Question: Impact of LIBOR on earnings - The weighted average LIBOR floor across the portfolio is about 74 basis points, with most U.S. borrowers having a 1% LIBOR floor [41] Question: Commentary on valuation and portfolio performance - The company maintained consistent credit quality, with no new nonaccruals and stable risk ratings across the portfolio [46] Question: Low level of sales and repayments - The muted M&A activity contributed to lower sales and repayments, with repayments primarily driven by revolver draws returning to the system [50] Question: Amendments in portfolio companies - Amendments were made for 11 companies, representing about 8% of the portfolio, with more than half accompanied by equity contributions from sponsors [53][54] Question: High-cost unsecured notes issuance - The issuance of unsecured notes was aimed at providing greater flexibility in the capital structure, despite the higher cost of debt [56]

Portfolio Composition and Strategy - The company primarily focuses on directly originating loans to middle market, sponsor-backed companies with $10-150 million of EBITDA, with a portfolio median EBITDA of $46.2 million[12] - The investment portfolio is highly diversified across 109 companies and 30 industries[12, 14] - The portfolio is mainly comprised of 88% first lien senior secured loans and 99.2% floating rate loans, with 91% having financial covenants[12] - Since inception, the company has invested approximately $3.7 billion in aggregate principal[13] Financial Performance and Credit Quality - The net investment income (NII) for Q2 2020 was $20.0 million, or $0.37 per share[12] - The return on equity (ROE) for Q2 2020 was 8.4%[12] - As of June 30, 2020, non-accrual investments represented 1.1% of the total investment portfolio at fair value[12] - The weighted average yield at amortized cost decreased to 6.6% as of June 30, 2020[14, 18] Balance Sheet and Debt - The total fair value of investments as of June 30, 2020, was $2476.0 million[14, 18, 35, 42] - The company's net asset value (NAV) per share decreased from $19.77 in Q2 2019 to $15.81 in Q2 2020[17, 23] - Total debt outstanding was $1550.2 million, resulting in a debt-to-equity ratio of 1.52x[19]

Bain Capital Specialty Finance, Inc. (NYSE:BCSF) Q1 2020 Earnings Conference Call May 7, 2020 8:30 AM ET Company Participants Katherine Schneider – Investor Relations Michael Ewald – President and Chief Executive Officer Mike Boyle – Vice President and Treasurer Sally Dornaus – Chief Financial Officer Conference Call Participants Chris York – JMP Securities Arren Cyganovich – Citi Operator Greetings. Welcome to the Bain Capital Specialty Finance First Quarter 2020 Earnings Conference Call. [Operator Instruc ...

Bain Capital Specialty Finance, Inc. (NYSE:BCSF) Q4 2019 Earnings Conference Call February 27, 2020 8:30 AM ET Company Participants Kyle Nagarkar - Investor Relations Michael Ewald - President and Chief Executive Officer Sally Dornaus - Chief Financial Officer Mike Boyle - Vice President and Treasurer Conference Call Participants Fin O'Shea - Wells Fargo Securities Ryan Lynch - KBW Derek Hewett - Bank of America Operator Greetings. Welcome to the Bain Capital Specialty Finance Fourth Quarter 2019 Earnings C ...

Key Personnel and Management - The company is dependent on key personnel from Bain Capital Credit and its Advisor, and the loss of these individuals could materially affect its financial condition and performance [179]. - Conflicts of interest may arise due to the involvement of executive officers and directors in multiple entities, potentially impacting investment opportunities [195]. - The company may face conflicts of interest due to the Advisor's potential to benefit from capital gains recognition and timing of sales [202]. - The company may incur additional costs and operational disruptions if its Advisor or Administrator resigns, affecting its financial condition and ability to pay distributions [271]. - The company is highly dependent on the communications and information systems of Bain Capital Credit, and any failure or interruption could materially affect its business and financial condition [275]. Investment Performance and Risks - The company may not replicate historical performance achieved by Bain Capital Credit or its Advisor, and future investment returns could be substantially lower than past results [184]. - The company operates in a highly competitive market for investment opportunities, which could reduce returns and result in losses [213]. - The due diligence process may not reveal all relevant facts about potential investments, leading to uninformed investment decisions and potential losses [186]. - The company may incur significant expenses in identifying investment opportunities that do not materialize, impacting overall financial performance [216]. - The company may face litigation risks related to its investment activities, which could divert management's attention and resources [242]. Market and Economic Conditions - The company faces risks related to global capital market disruptions, which could adversely affect debt and equity capital markets and its business operations [187]. - A prolonged period of market illiquidity may lead to a reduction in the volume of loans and debt securities originated, adversely impacting the value of portfolio investments [191]. - The company may invest in debt securities issued by European issuers, and uncertainties related to Brexit could negatively impact financial markets and economic growth [192]. - Adverse developments in credit markets may impair the company's ability to enter into new debt financing arrangements, affecting growth and refinancing [194]. - Economic downturns could increase nonperforming assets and decrease portfolio value, adversely affecting revenues and net income [310]. Financial Structure and Capital Management - The management fee structure is based on gross assets, resulting in a base management fee of 1.5% post-IPO, up from 0.75% prior to the IPO [205]. - The incentive fee increased to 17.5% based on pre-incentive fee net investment income and capital gains after the IPO, compared to 15.0% before [205]. - The company intends to raise additional capital through debt or equity securities, which may be limited by unfavorable economic conditions [218]. - The company is required to distribute at least 90% of its net ordinary income and net short-term capital gains to maintain RIC eligibility, limiting available funds for new investments [218]. - The company is subject to regulatory limitations on raising equity capital and incurring indebtedness, which could negatively affect its financial condition and operations [190]. Debt and Interest Rate Risks - The company has total assets of $2,645.6 million and outstanding indebtedness of $1,579.2 million as of December 31, 2019, resulting in net assets of $1,018.4 million [230]. - An increase in interest rates could adversely affect the company's portfolio companies' ability to service their debt obligations, potentially leading to increased defaults [233]. - The average interest rate on the company's indebtedness was 4.68% as of December 31, 2019 [230]. - The company may need to refinance its indebtedness and cannot assure that it will be able to do so on commercially reasonable terms [225]. - The company may pledge up to 100% of its assets under debt agreements, which could have a material adverse effect on its financial condition if a default occurs [239]. Regulatory and Compliance Issues - The company is subject to the 1940 Act and must maintain at least 70% of total assets in qualifying assets to avoid regulatory restrictions [303]. - The company has an asset coverage ratio requirement of at least 200% for issuing senior securities, which could be impacted by declines in asset value [306]. - The company is restricted from engaging in certain transactions with affiliates without prior approval, limiting investment opportunities [296]. - New or modified laws and regulations, including those from Dodd-Frank, may adversely affect the company's business and operations [251][252]. - The company may be subject to increased oversight and regulation due to its activities outside the regulated banking system, potentially increasing costs and limiting operations [259]. Investment Strategy and Portfolio Management - The company may pursue growth through acquisitions or strategic investments, but success is not guaranteed [219]. - The company may invest in high yield debt, which carries greater credit and liquidity risk compared to higher-rated debt obligations [343]. - The company may invest in equity securities, which are subject to greater price volatility and may decline in value or become worthless [344]. - The company is classified as a non-diversified investment company, which increases the risk of loss if there is a decline in the market value of any loan in which it has invested a large percentage of its assets [360]. - There is no assurance that the company will make follow-on investments in portfolio companies, which could impair the value of its portfolio [363]. Collateral and Liquidation Risks - The rights of the company regarding collateral securing loans may be limited by intercreditor agreements with holders of senior debt [372]. - In the event of liquidation, obligations secured by first priority liens will be repaid in full before any distributions to the company [371]. - The value of collateral in liquidation depends on market conditions and may not be sufficient to satisfy loan obligations secured by second priority liens [370]. - The company may not have control over actions taken regarding collateral if first priority liens are outstanding [373]. - The company may face risks related to the liquidity and value of assets over which other lenders have a lien [371].