Table of Contents Titleofeachclass UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 814-01175 BAIN CAPITAL SPECIALTY FINANCE, INC. (Exact name of registrant as specified in its charter) Delaware 81-2878769 (Sta ...

Bain Capital Specialty Finance, Inc. (NYSE:BCSF) Q2 2022 Earnings Conference Call August 4, 2022 8:30 AM ET Company Participants Katherine Schneider - IR Michael Ewald - CEO Sally Dornaus - CFO Michael Boyle - President Conference Call Participants Ryan Lynch - KBW Operator Good day, and welcome to the Bain Capital Specialty Finance Second Quarter ended June 30, 2022, Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Katherine Schneider ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 814-01175 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Tradi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 814-01175 BAIN CAPITAL SPECIALTY FINANCE, INC. (Exact name of registrant as specified in its charter) Delaware 81-2878769 (State or other jurisdiction of (I.R.S. Emp ...

Bain Capital Specialty Finance, Inc. (NYSE:BCSF) Q4 2021 Earnings Conference Call February 24, 2022 8:30 AM ET Company Participants Katherine Schneider - Investor Relations Michael Ewald - Chief Executive Officer Mike Boyle - President Sally Dornaus - Chief Financial Officer Conference Call Participants Ryan Lynch - KBW Operator Good day, and welcome to the Bain Capital Specialty Finance Fourth Quarter and Fiscal Year Ended December 31, 2021 Earnings Conference Call. Today's conference is being recorded. At ...

PART I [Item 1. Business](index=7&type=section&id=Item%201.%20Business) BCSF operates as an externally managed, closed-end business development company (BDC) and regulated investment company (RIC), primarily investing in senior direct lending to middle-market companies - BCSF was formed on October 5, 2015, commenced investment operations on October 13, 2016, and completed its initial public offering (IPO) on November 19, 2018, with shares trading on the NYSE under 'BCSF'[14](index=14&type=chunk) - The company is regulated as a Business Development Company (BDC) under the 1940 Act and has elected to be treated as a Regulated Investment Company (RIC) for U.S. federal income tax purposes[14](index=14&type=chunk) - Primary investment focus is on senior direct lending to middle-market companies with **$10.0 million to $150.0 million** in annual EBITDA, concentrating on first or second lien secured investments and seeking effective voting control[14](index=14&type=chunk)[27](index=27&type=chunk) - The company's asset coverage requirement under the 1940 Act was reduced from **200% to 150%** effective February 2, 2019, following stockholder approval[15](index=15&type=chunk)[98](index=98&type=chunk)[102](index=102&type=chunk) General The Investment Advisor About Bain Capital Credit The Board of Directors Investment Decision Process Investment Strategy Investment Focus Competition Investment Advisory Agreement; Administration Agreement Fees and Expenses Capital Resources and Borrowings BCSF Revolving Credit Facility 2018-1 Notes Citibank Revolving Credit Facility JPM Credit Facility 2019-1 Debt Revolving Advisor Loan 2023 Notes March 2026 Notes October 2026 Notes Sumitomo Credit Facility Dividend Reinvestment Plan Administration Regulation as a Business Development Company Qualifying Assets Limitations on Leverage Managerial Assistance to Portfolio Companies Monitoring Investments Temporary Investments Senior Securities Code of Ethics Compliance Policies and Procedures Sarbanes-Oxley Act of 2002 Proxy Voting Policies and Procedures Privacy Principles Information Available Certain U.S. Federal Income Tax Consequences Portfolio Composition as of December 31, 2021 (Fair Value) | Investment Type | Fair Value ($ thousands) | Percentage of Total Portfolio | | :-------------------------------- | :----------------------- | :---------------------------- | | First Lien Senior Secured Loans | 1,774,675 | 77.5 % | | Equity Interest | 151,844 | 6.6 % | | Subordinated Note Investment Vehicles | 125,437 | 5.5 % | | Second Lien Senior Secured Loans | 118,561 | 5.2 % | | Preferred Equity | 53,991 | 2.4 % | | Equity Interest Investment Vehicles | 44,444 | 1.9 % | | Subordinated Debt | 20,027 | 0.9 % | | Warrants | 126 | 0.0 % | | **Total** | **2,289,105** | **100.0 %** | Portfolio Composition as of December 31, 2020 (Fair Value) | Investment Type | Fair Value ($ thousands) | Percentage of Total Portfolio | | :-------------------------------- | :----------------------- | :---------------------------- | | First Lien Senior Secured Loans | 2,164,910 | 87.1 % | | Second Lien Senior Secured Loans | 161,960 | 6.6 % | | Equity Interests | 119,905 | 4.8 % | | Preferred Equity | 37,713 | 1.5 % | | Warrants | — | 0.0 % | | **Total** | **2,484,488** | **100.0 %** | Investment Performance Rating as of December 31, 2021 | Rating | Fair Value ($ thousands) | Percentage of Total | Number of Companies | Percentage of Total | | :----- | :----------------------- | :------------------ | :------------------ | :------------------ | | 1 | 42,233 | 1.9 % | 4 | 3.8 % | | 2 | 2,017,059 | 88.1 | 95 | 89.6 | | 3 | 229,813 | 10.0 | 7 | 6.6 | | 4 | — | 0.0 | — | 0.0 | | **Total** | **2,289,105** | **100.0 %** | **106** | **100.0 %** | Investment Performance Rating as of December 31, 2020 | Rating | Fair Value ($ thousands) | Percentage of Total | Number of Companies | Percentage of Total | | :----- | :----------------------- | :------------------ | :------------------ | :------------------ | | 1 | 42,942 | 1.7 % | 3 | 2.9 % | | 2 | 2,121,057 | 85.4 | 87 | 82.8 | | 3 | 315,383 | 12.7 | 14 | 13.3 | | 4 | 5,106 | 0.2 | 1 | 1.0 | | **Total** | **2,484,488** | **100.0 %** | **105** | **100.0 %** | [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks associated with investing in BCSF common stock, covering business, market, investment, and tax-related factors - Investing in BCSF common stock involves a high degree of risk, including potential partial or total loss of capital, as the company primarily invests in illiquid, privately negotiated debt and junior investments[121](index=121&type=chunk)[122](index=122&type=chunk) - The company's ability to achieve investment objectives is highly dependent on the financial and managerial expertise of its Advisor and Bain Capital Credit, with the loss of key individuals posing a material adverse effect[123](index=123&type=chunk) - Conflicts of interest may arise due to the Advisor's management and incentive fee structure, which is based on gross assets and can incentivize the use of leverage and speculative investments, potentially misaligning with stockholder interests[134](index=134&type=chunk) - The expected discontinuation of LIBOR could significantly impact BCSF's business, leading to operational challenges in amending existing loan agreements and potential mismatches in interest rates, affecting net investment income and distributions[147](index=147&type=chunk)[149](index=149&type=chunk) - A majority of BCSF's portfolio investments are recorded at fair value determined in good faith by the Board, often using unobservable inputs (Level 3), leading to inherent uncertainty and potential material differences from actual liquidation values[153](index=153&type=chunk)[155](index=155&type=chunk) - The COVID-19 pandemic has caused and continues to cause disruptions in global debt and equity markets, negatively impacting portfolio companies' operating results, increasing default risks, and potentially limiting BCSF's investment income and distributions[187](index=187&type=chunk)[189](index=189&type=chunk)[191](index=191&type=chunk) - BCSF invests in middle-market companies, which inherently involve higher risks due to shorter operating histories, narrower product lines, smaller market shares, and greater vulnerability to economic downturns compared to larger corporations[197](index=197&type=chunk)[199](index=199&type=chunk) - Failure to maintain RIC tax qualification would subject BCSF to corporate-level income tax, substantially reducing net assets and income available for distribution to stockholders[249](index=249&type=chunk)[251](index=251&type=chunk)[258](index=258&type=chunk) Risks Relating to Our Business and Structure Risks Relating to COVID-19 and General Market Conditions Risks Relating to Our Investments Federal Income Tax and Other Tax Risks Risks Relating to Our Common Stock Effect of Leverage on Returns (as of December 31, 2021) | Assumed Return on our Portfolio (Net of Expenses) | Corresponding return to common stockholder assuming actual asset coverage (177%) | Corresponding return to common stockholder assuming 150% asset coverage | | :------------------------------------------------ | :----------------------------------------------------------------------------- | :--------------------------------------------------------------------- | | (10.00%) | (27.34%) | (36.47%) | | (5.00%) | (15.66%) | (21.29%) | | 0.00% | (3.97%) | (6.10%) | | 5.00% | 7.72% | 9.08% | | 10.00% | 19.40% | 24.26% | [Item 1B. Unresolved Staff Comments](index=81&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - No unresolved staff comments were reported[295](index=295&type=chunk) [Item 2. Properties](index=81&type=section&id=Item%202.%20Properties) The company's principal executive office is located in Boston, Massachusetts, and it does not own any real estate - The principal executive office is at 200 Clarendon Street, 37th Floor, Boston, Massachusetts 02116[295](index=295&type=chunk) - The company does not own any real estate and believes current facilities are adequate, with additional space available at competitive prices if required[295](index=295&type=chunk) [Item 3. Legal Proceedings](index=81&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, nor is it aware of any threatened against it - The company is not currently subject to any material legal proceedings, nor is any material legal proceeding threatened against it[296](index=296&type=chunk) - The company may be a party to certain legal proceedings in the ordinary course of business, including those related to enforcing rights under loans or contracts with portfolio companies[296](index=296&type=chunk) [Item 4. Mine Safety Disclosures](index=81&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[297](index=297&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=82&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) BCSF common stock trades on the NYSE under 'BCSF', with quarterly dividends intended to maintain RIC tax treatment and a dividend reinvestment plan in place - BCSF common stock is traded on the New York Stock Exchange under the symbol 'BCSF'[298](index=298&type=chunk) - As of February 11, 2022, there were approximately **113** holders of record of the common stock[299](index=299&type=chunk) - The company intends to distribute quarterly dividends to stockholders to maintain its RIC tax treatment, requiring distributions of at least **90%** of net ordinary income and net short-term capital gains in excess of net long-term capital losses[300](index=300&type=chunk) - A Dividend Reinvestment Plan (DRIP) automatically reinvests cash distributions into additional common stock for stockholders who do not opt out[301](index=301&type=chunk)[303](index=303&type=chunk) - On May 7, 2019, the Board authorized repurchases of up to **$50 million** of common stock, but as of December 31, 2021, no repurchases had occurred[399](index=399&type=chunk) - In June 2020, BCSF completed a transferable subscription rights offering, issuing **12,912,453** shares at **$10.2163** per share, generating net proceeds of **$129.6 million**[401](index=401&type=chunk) Market Information Holders Distribution Policy Dividend Reinvestment Plan Performance Graph Recent Sales of Unregistered Securities and Use of Proceeds SENIOR SECURITIES Senior Securities Outstanding (in millions) | Class and Year/Period | Total Outstanding | Asset Coverage Per Unit ($ per $1,000 of indebtedness) | | :-------------------- | :---------------- | :----------------------------------------------------- | | **2018-1 Notes** | | | | December 31, 2021 | $365.7 | $6,920.2 | | December 31, 2020 | $365.7 | $6,927.8 | | December 31, 2019 | $365.7 | $7,103.1 | | December 31, 2018 | $365.7 | $4,480.7 | | **2019-1 Debt** | | | | December 31, 2021 | $352.5 | $7,179.3 | | December 31, 2020 | $398.8 | $6,352.8 | | December 31, 2019 | $398.8 | $6,513.6 | | **2023 Notes** | | | | December 31, 2021 | $112.5 | $22,495.2 | | December 31, 2020 | $150.0 | $16,890.1 | | **March 2026 Notes** | | | | December 31, 2021 | $300.0 | $8,435.7 | | **October 2026 Notes**| | | | December 31, 2021 | $300.0 | $8,435.7 | | **Total Senior Securities** | | | | December 31, 2021 | $1,430.7 | $1,768.9 | | December 31, 2020 | $1,465.5 | $1,728.8 | | December 31, 2019 | $1,579.3 | $1,644.8 | | December 31, 2018 | $637.0 | $2,572.4 | | December 31, 2017 | $451.0 | $2,124.1 | | December 31, 2016 | $59.1 | $2,867.1 | [Item 6. Selected Consolidated Financial Data](index=85&type=section&id=Item%206.%20Selected%20Consolidated%20Financial%20Data) This section presents selected consolidated historical financial data for BCSF from 2017 to 2021, including statements of operations, per share data, and balance sheet highlights Selected Consolidated Statements of Operations Data (in thousands) | Metric | 2021 | 2020 | 2019 | 2018 | 2017 | | :---------------------------------------- | :-------- | :-------- | :-------- | :------- | :------ | | Total investment income | $197,394 | $194,460 | $197,945 | $99,294 | $24,605 | | Total expenses, net of waivers | 109,522 | 108,397 | 113,078 | 43,364 | 10,396 | | Net investment income (loss) before taxes | 87,872 | 86,063 | 84,867 | 55,930 | 14,209 | | Excise tax expense | 134 | 232 | — | — | 5 | | Net investment income (loss) after taxes | 87,738 | 85,831 | 84,867 | 55,930 | 14,204 | | Net realized and unrealized gain (loss) | 32,069 | (77,553) | 13,218 | (29,285) | 5,096 | | Net increase in net assets from operations| $119,807 | $8,278 | $98,085 | $26,645 | $19,300 | Selected Per Share Data | Metric | 2021 | 2020 | 2019 | 2018 | 2017 | | :---------------------------------------- | :---- | :---- | :---- | :--- | :--- | | Net investment income (loss) | $1.36 | $1.46 | $1.64 | $1.45 | $0.73 | | Net increase in net assets from operations| $1.86 | $0.14 | $1.90 | $0.69 | $0.99 | | Distributions declared | $1.36 | $1.43 | $1.64 | $1.52 | $0.70 | Selected Consolidated Statements of Assets and Liabilities Data (at period end, in thousands) | Metric | 2021 | 2020 | 2019 | 2018 | 2017 | | :---------------------------------------- | :---------- | :---------- | :---------- | :---------- | :-------- | | Total assets | $2,571,193 | $2,603,492 | $2,645,554 | $1,791,014 | $988,251 | | Total investments, at fair value | 2,289,105 | 2,484,488 | 2,527,055 | 1,727,806 | 831,578 | | Total liabilities | 1,471,187 | 1,535,488 | 1,627,154 | 789,385 | 481,288 | | Total debt, net of unamortized debt costs | 1,414,982 | 1,458,360 | 1,574,635 | 634,925 | 451,000 | | Total net assets | 1,100,006 | 1,068,004 | 1,018,400 | 1,001,629 | 506,963 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=86&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section details BCSF's financial condition, operations, and cash flows for 2019-2021, covering investment strategy, revenue, expenses, leverage, and the impact of COVID-19 - BCSF is an externally managed specialty finance company focused on lending to middle market companies, operating as a BDC and managed by BCSF Advisors, LP[316](index=316&type=chunk) - From October 13, 2016, through December 31, 2021, BCSF invested approximately **$5,019.3 million** in aggregate principal amount of debt and equity investments[316](index=316&type=chunk) - The company's primary revenue sources are interest income from debt investments and distributions on equity investments, with a majority (**97.8% in 2021, 99.2% in 2020**) of debt investments bearing floating rates[320](index=320&type=chunk) - BCSF's asset coverage ratio was **177%** as of December 31, 2021, and **173%** as of December 31, 2020, exceeding the **150%** regulatory requirement[327](index=327&type=chunk)[396](index=396&type=chunk) - The COVID-19 pandemic has led to increased draw requests on credit facilities and requests for loan modifications from portfolio companies, but BCSF has maintained compliance with asset coverage and financial covenants[328](index=328&type=chunk) - During 2021, BCSF invested **$1,185.3 million** and had **$1,431.4 million** in repayments/sales, resulting in a net decrease of **$246.1 million** in investments[337](index=337&type=chunk) - The International Senior Loan Program, LLC (ISLP) joint venture was formed on February 9, 2021, with Pantheon, investing primarily in non-US first lien senior secured loans. BCSF contributed **$317.1 million** in debt investments for a **70.5%** stake and received **$190.2 million** in cash[363](index=363&type=chunk)[576](index=576&type=chunk) Overview Investments Revenues Expenses Leverage Impact of COVID-19 Investment Decision Process Environmental, Social and Governance Portfolio and Investment Activity Antares Bain Capital Complete Financing Solution International Senior Loan Program, LLC Results of Operations Financial Condition, Liquidity and Capital Resources Equity Debt Distribution Policy Commitments and Off-Balance Sheet Arrangements Significant Accounting Estimates and Critical Accounting Policies Recent Accounting Pronouncements Contractual Obligations Subsequent Events Total Investment Income (in thousands) | Year | Total Investment Income | | :--- | :---------------------- | | 2021 | $197,394 | | 2020 | $194,460 | | 2019 | $197,945 | Composition of Investment Income (in thousands) | Income Type | 2021 | 2020 | 2019 | | :---------------- | :------- | :------ | :------ | | Interest income | $167,343 | $174,197 | $179,917 | | Dividend income | 13,115 | 9,324 | 16,741 | | PIK income | 10,763 | 8,778 | 478 | | Other income | 6,173 | 2,161 | 809 | | **Total** | **$197,394** | **$194,460** | **$197,945** | Total Expenses, Net of Waivers (in thousands) | Year | Total Expenses, Net of Waivers | | :--- | :----------------------------- | | 2021 | $109,522 | | 2020 | $108,397 | | 2019 | $113,078 | Net Realized and Unrealized Gains and Losses (in thousands) | Category | 2021 | 2020 | 2019 | | :-------------------------------------------------------------------- | :---------- | :---------- | :-------- | | Net realized gains (losses) | $(10,902) | $(27,222) | $7,785 | | Net unrealized appreciation (depreciation) | 42,971 | (50,331) | 5,433 | | **Net increase in net assets resulting from operations** | **$119,807**| **$8,278** | **$98,085** | Cash, Foreign Cash, Restricted Cash and Cash Equivalents (in thousands) | Date | Amount | | :--------------- | :-------- | | December 31, 2021| $203,581 | | December 31, 2020| $81,702 | | December 31, 2019| $68,846 | Debt Outstanding (in thousands) | Debt Type | 2021 Principal Outstanding | 2020 Principal Outstanding | | :--------------------- | :------------------------- | :------------------------- | | 2018-1 Notes | $365,700 | $365,700 | | 2019-1 Debt | $352,500 | $398,750 | | 2023 Notes | $112,500 | $150,000 | | March 2026 Notes | $300,000 | — | | October 2026 Notes | $300,000 | — | | Sumitomo Credit Facility | — | — | | **Total Debt** | **$1,430,700** | **$1,465,507** | Distributions Declared (in thousands) | Year | Total Distributions Declared | | :--- | :--------------------------- | | 2021 | $87,805 | | 2020 | $87,029 | | 2019 | $84,636 | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=128&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) BCSF is exposed to financial market risks, primarily interest rate fluctuations, due to its illiquid loan investments and fair value measurements, with potential hedging strategies for foreign currency - BCSF is subject to financial market risks, including changes in interest rates, due to its investments in illiquid loans and securities of middle-market companies[466](index=466&type=chunk)[469](index=469&type=chunk) - Many portfolio investments are valued at fair value using unobservable inputs (Level 3), leading to significant uncertainty in valuation[469](index=469&type=chunk) - The company may employ hedging techniques, such as forward contracts, to minimize exposure to foreign currency exchange rate fluctuations, but their effectiveness is not assured[470](index=470&type=chunk) Annualized Impact of Hypothetical Base Rate Changes on Interest Income and Expense (in thousands) | Change in Interest Rates | Increase in (Decrease) Interest Income | Increase in (Decrease) Interest Expense | Net Increase (Decrease) in Net Investment Income | | :----------------------- | :------------------------------------- | :-------------------------------------- | :----------------------------------------------- | | Down 25 basis points | $(729) | $(1,502) | $773 | | Up 100 basis points | $7,556 | $7,182 | $374 | | Up 200 basis points | $28,935 | $14,364 | $14,571 | | Up 300 basis points | $50,477 | $21,546 | $28,931 | [Item 8. Consolidated Financial Statements and Supplementary Data](index=128&type=section&id=Item%208.%20Consolidated%20Financial%20Statements%20and%20Supplementary%20Data) This section presents BCSF's audited consolidated financial statements for 2019-2021, including statements of assets, operations, changes in net assets, cash flows, and detailed notes - The consolidated financial statements for Bain Capital Specialty Finance, Inc. and its subsidiaries as of and for the years ended December 31, 2021, 2020, and 2019 are included, along with the report of the independent registered public accounting firm[471](index=471&type=chunk)[475](index=475&type=chunk) - The financial statements are prepared in accordance with US GAAP and follow accounting and reporting guidance for investment companies (ASC Topic 946)[457](index=457&type=chunk)[533](index=533&type=chunk) Consolidated Statements of Assets and Liabilities (as of December 31, in thousands) | Asset/Liability | 2021 | 2020 | | :-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | :---------- | :---------- | | **Assets** | | | | Investments at fair value | $2,289,105 | $2,484,488 | | Cash and cash equivalents | 87,443 | 53,704 | | Foreign cash | 29,979 | 972 | | Restricted cash and cash equivalents | 86,159 | 27,026 | | Collateral on forward currency exchange contracts | 2,815 | 4,934 | | Deferred financing costs | 2,178 | 3,131 | | Interest receivable on investments | 19,269 | 15,720 | | Receivable for sales and paydowns of investments and other investment transactions | 30,334 | 5,928 | | Prepaid Insurance | 193 | — | | Unrealized appreciation on forward currency exchange contracts | 5,321 | — | | Dividend receivable | 18,397 | 7,589 | | **Total Assets** | **$2,571,193**| **$2,603,492**| | **Liabilities** | | | | Debt (net of unamortized debt issuance costs) | $1,414,982 | $1,458,360 | | Interest payable | 7,058 | 8,223 | | Payable for investments purchased | 7,594 | 10,991 | | Unrealized depreciation on forward currency exchange contracts | — | 22,614 | | Base management fee payable | 8,792 | 6,289 | | Incentive fee payable | 4,727 | 3,799 | | Accounts payable and accrued expenses | 6,083 | 3,261 | | Distributions payable | 21,951 | 21,951 | | **Total Liabilities** | **$1,471,187**| **$1,535,488**| | **Net Assets** | | | | Common stock, par value $0.001 per share, 100,000,000,000 shares authorized, 64,562,265 and 64,562,265 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | 65 | 65 | | Paid in capital in excess of par value | 1,168,384 | 1,166,453 | | Total distributable earnings (loss) | (68,443) | (98,514) | | **Total Net Assets** | **$1,100,006**| **$1,068,004**| | **Total Liabilities and Total Net assets** | **$2,571,193**| **$2,603,492**| | Net asset value per share | $17.04 | $16.54 | Consolidated Statements of Operations (for the years ended December 31, in thousands) | Income/Expense Category | 2021 | 2020 | 2019 | | :------------------------------------------------------------------------------------ | :---------- | :---------- | :---------- | | **Income** | | | | | Total investment income from non-controlled/non-affiliate investments | $164,865 | $180,928 | $179,453 | | Total investment income from non-controlled/affiliate investments | 7,440 | 2,068 | — | | Total investment income from controlled affiliate investments | 25,089 | 11,464 | 18,492 | | **Total investment income** | **$197,394**| **$194,460**| **$197,945**| | **Expenses** | | | | | Interest and debt financing expenses | 51,345 | 63,309 | 66,330 | | Base management fee | 34,888 | 35,215 | 32,702 | | Incentive fee | 24,028 | 4,473 | 17,418 | | Professional fees | 2,854 | 2,626 | 2,297 | | Directors fees | 725 | 726 | 546 | | Other general and administrative expenses | 5,038 | 5,398 | 4,772 | | Total expenses before fee waivers | 118,878 | 111,747 | 124,065 | | Base management fee waiver | (4,837) | (2,676) | (8,242) | | Incentive fee waiver | (4,519) | (674) | (2,745) | | **Total expenses, net of fee waivers** | **$109,522**| **$108,397**| **$113,078**| | Net investment income before taxes | 87,872 | 86,063 | 84,867 | | Excise tax expense | 134 | 232 | — | | **Net investment income** | **$87,738** | **$85,831** | **$84,867** | | **Net realized and unrealized gains (losses)** | | | | | Net realized gain (loss) on non-controlled/non-affiliate investments | 25,084 | (33,824) | (3,487) | | Net realized gain (loss) on controlled affiliate investments | (3,858) | — | 265 | | Net realized gain (loss) on foreign currency transactions | (3,496) | 130 | (36) | | Net realized gain (loss) on forward currency exchange contracts | (23,773) | 6,472 | 11,043 | | Net realized loss on extinguishment of debt | (4,859) | — | — | | Net change in unrealized appreciation (depreciation) on foreign currency translation | (936) | 108 | (130) | | Net change in unrealized appreciation (depreciation) on forward currency exchange contracts | 27,935 | (22,396) | (9,540) | | Net change in unrealized appreciation (depreciation) on non-controlled/non-affiliate investments | (568) | (6,744) | 13,308 | | Net change in unrealized appreciation (depreciation) on non-controlled/affiliate investments | 12,576 | (174) | — | | Net change in unrealized appreciation (depreciation) on controlled affiliate investments | 3,964 | (21,125) | 1,795 | | **Total net gains (losses)** | **$32,069** | **$(77,553)**| **$13,218** | | **Net increase in net assets resulting from operations** | **$119,807**| **$8,278** | **$98,085** | | Basic and diluted net investment income per common share | $1.36 | $1.46 | $1.64 | | Basic and diluted increase in net assets resulting from operations per common share | $1.86 | $0.14 | $1.90 | | Basic and diluted weighted average common shares outstanding | 64,562,265 | 58,670,518 | 51,603,415 | Consolidated Statements of Changes in Net Assets (for the years ended December 31, in thousands) | Category | 2021 | 2020 | 2019 | | :--------------------------------------------------------------------- | :---------- | :---------- | :---------- | | **Operations:** | | | | | Net investment income | $87,738 | $85,831 | $84,867 | | Net realized gain (loss) | (10,902) | (27,222) | 7,785 | | Net change in unrealized appreciation (depreciation) | 42,971 | (50,331) | 5,433 | | **Net increase (decrease) in net assets resulting from operations** | **$119,807**| **$8,278** | **$98,085** | | **Stockholder distributions:** | | | | | Distributions from distributable earnings | (87,805) | (87,029) | (84,636) | | **Net decrease in net assets resulting from stockholder distributions**| **$(87,805)**| **$(87,029)**| **$(84,636)**| | **Capital share transactions:** | | | | | Issuance of common stock, net | — | 128,355 | — | | Reinvestment of stockholder distributions | — | — | 3,322 | | **Net increase in net assets resulting from capital share transactions**| **—** | **$128,355**| **$3,322** | | **Total increase in net assets** | **$32,002** | **$49,604** | **$16,771** | | Net assets at beginning of year | 1,068,004 | 1,018,400 | 1,001,629 | | **Net assets at end of year** | **$1,100,006**| **$1,068,004**| **$1,018,400**| | Net asset value per common share | $17.04 | $16.54 | $19.72 | | Common stock outstanding at end of period | 64,562,265 | 64,562,265 | 51,649,812 | Consolidated Statements of Cash Flows (for the years ended December 31, in thousands) | Cash Flow Category | 2021 | 2020 | 2019 | | :-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | :------------ | :------------ | :------------ | | **Cash flows from operating activities** | | | | | Net increase in net assets resulting from operations | $119,807 | $8,278 | $98,085 | | Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities: | | | | | Purchases of investments | (1,177,339) | (516,234) | (1,413,662) | | Proceeds from principal payments and sales of investments | 1,399,163 | 538,494 | 1,069,492 | | Net realized (gain) loss from investments | (21,226) | 33,824 | 3,222 | | Net realized loss on foreign currency transactions | 3,496 | (130) | 36 | | Net realized loss on extinguishment of debt | 4,859 | — | — | | Net change in unrealized (appreciation) depreciation on forward currency exchange contracts | (27,935) | 22,396 | 9,540 | | Net change in unrealized (appreciation) depreciation on investments | (15,972) | 28,043 | (15,103) | | Net change in unrealized (appreciation) depreciation on foreign currency translation | 936 | (108) | 130 | | Increase in investments due to PIK | (10,763) | (8,779) | (479) | | Accretion of discounts and amortization of premiums | (5,674) | (5,905) | (4,476) | | Amortization of deferred financing costs and debt issuance costs | 5,731 | 2,675 | 1,497 | | Changes in operating assets and liabilities: | | | | | Collateral on forward currency exchange contracts | 2,119 | (4,934) | 4 | | Interest receivable on investments | (3,549) | 6,762 | (16,233) | | Prepaid Insurance | (193) | — | 1 | | Dividend receivable | (10,808) | (6,628) | 7,748 | | Interest payable | (1,165) | (7,311) | 10,699 | | Collateral payable on forward currency exchange contracts | — | (331) | 331 | | Base management fee payable | 2,503 | (976) | 4,315 | | Incentive fee payable | 928 | (714) | 1,213 | | Accounts payable and accrued expenses | 636 | 996 | 874 | | **Net cash provided by (used in) operating activities** | **$265,554** | **$89,418** | **$(242,766)**| | **Cash flows from financing activities** | | | | | Borrowings on debt | 1,425,050 | 597,262 | 1,249,048 | | Repayments on debt | (1,461,826) | (710,802) | (884,529) | | Payments of financing costs | — | (1,447) | (409) | | Payments of offering costs | — | (3,545) | (1,820) | | Payments of debt issuance costs | (14,053) | (3,648) | (2,795) | | Proceeds from issuance of common stock | — | 131,917 | — | | Stockholder distributions paid | (87,805) | (86,254) | (81,246) | | **Net cash (used in) provided by financing activities** | **$(138,634)**| **$(76,517)** | **$278,249** | | Net increase in cash, foreign cash, restricted cash and cash equivalents | 126,920 | 12,901 | 35,483 | | Effect of foreign currency exchange rates | (5,041) | (45) | 92 | | Cash, foreign cash, restricted cash and cash equivalents, beginning of year | 81,702 | 68,846 | 33,271 | | **Cash, foreign cash, restricted cash and cash equivalents, end of year** | **$203,581** | **$81,702** | **$68,846** |

Bain Capital Specialty Finance, Inc. (NYSE:BCSF) Q3 2021 Earnings Conference Call November 4, 2021 8:00 AM ET Company Participants Katherine Schneider - Investor Relations Michael Ewald - Chief Executive Officer Michael Boyle - President Sally Dornaus - Chief Financial Officer Conference Call Participants Paul Johnson - Keefe, Bruyette, & Woods, Inc. Finian O'Shea - Wells Fargo Securities, LLC Operator Good day, and welcome to the Bain Capital Specialty Finance Third Quarter Ended September 30, 2021 Earning ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 814-01175 BAIN CAPITAL SPECIALTY FINANCE, INC. (Exact name of registrant as specified in its charter) Delaware 81-2878769 (State or other jurisdiction of (I.R.S. ...