Focus of Article: The focus of PART 1 of this article is to analyze Blackstone Secured Lending’s (BXSL) recent results and compare a handful of the company’s metrics to 11 business development company (“BDC”) peers. This analysis will show past and current data with supporting documentation. Table 1 will compare BXSL’s recent net asset value (“NAV”) economic return (loss), adjusted net investment income (“NII”), stock price to annualized NII ratio, and percentage of total investment income attributable to c ...

Core Insights - Golub Capital (GBDC) has provided significant value creation for its shareholders over the past few years, indicating a strong performance in the market [1] - The focus on dividend investing is highlighted as a key strategy for achieving financial freedom, emphasizing its accessibility for investors [1] Company Overview - Golub Capital is recognized for its long-term value creation, with a strong emphasis on dividends as a means of income generation [1] - The company operates in various sectors including tech, real estate, software, finance, and consumer staples, which are also reflected in the investment portfolio [1] Investment Strategy - The article promotes dividend investing as a straightforward approach to building long-term wealth, aiming to demystify the process for potential investors [1] - The author’s experience in M&A and business valuation underlines the importance of financial modeling and due diligence in assessing company health [1]

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Financial Data and Key Metrics Changes - For the fiscal quarter ending September 30, 2025, adjusted net investment income (NII) per share was $0.39, translating to an adjusted NII return on equity (ROE) of 10.4% [4] - Adjusted net income per share was $0.36 for an adjusted ROE of 9.6% [4] - Cumulative distributions for fiscal year 2025 totaled $1.65 per share, representing 10.9% of end-of-year net asset value per share [4] - The net asset value per share at the end of fiscal year 2025 was $14.97, which is 34 cents above the net asset value per share at its IPO in 2010 [5] Business Line Data and Key Metrics Changes - Approximately 90% of GBDC's investment portfolio at fair value remains in the highest-performing internal rating categories [10] - Investments on non-accrual status decreased to 0.3% of the total investment portfolio at fair value, well below the BDC peer industry average [10] - GBDC's investment income yield was 10.4%, a sequential decline of 20 basis points [11] - The weighted average rate on new investments was 8.9%, a decline of 30 basis points from the prior quarter [18] Market Data and Key Metrics Changes - The private credit direct lending market is facing headwinds, including narrowed spreads and a credit cycle with an unusual level of defaults and credit stress [6][7] - The overall credit performance remained solid, but the market is experiencing tighter spreads across various debt categories [5][6] Company Strategy and Development Direction - GBDC's investment strategy focuses on providing first-lien senior-secured loans to middle-market companies backed by strong private equity sponsors [3] - The company plans to approach dividend questions with a strategy aimed at maintaining stable net asset value per share, minimizing excise taxes, and adjusting base distribution levels infrequently [8] - GBDC aims to leverage its existing sponsor relationships and portfolio company incumbencies for origination volume while remaining selective in underwriting [13] Management's Comments on Operating Environment and Future Outlook - The U.S. economy shows surprising resilience, but there are signs of weakness, particularly among lower-end consumers [25][26] - Elevated credit stress is expected to persist, impacting different BDCs in varying ways, with a widening gap between successful and struggling managers [26][27] - Management emphasizes the importance of cautious portfolio examination and early intervention to mitigate potential credit losses [28] Other Important Information - GBDC's investment portfolio decreased modestly to just under $8.8 billion at fair value due to repayments and exits [12] - The company repurchased 368,000 shares during the quarter, totaling 2.9 million shares or $40.6 million for the fiscal year [16] Q&A Session Summary Question: Changes in availability of equity co-invest - Management stated that there have been no meaningful changes in their approach or the availability of equity co-investments over the past years [31][32] Question: Themes in the economy and cost inflation - Management expressed optimism about capital spending due to new provisions but raised concerns about stress among subprime consumers [36][37] Question: Compression of spreads and future outlook - Management clarified that the compression of private credit spreads is not solely due to supply-demand imbalances and emphasized the need for a broad change in investor sentiment for spreads to change [39][40]

Financial Data and Key Metrics Changes - For the fiscal quarter ending September 30, 2025, adjusted net investment income (NII) per share was $0.39, with an adjusted NII return on equity (ROE) of 10.4% [4] - Adjusted net income per share was $0.36, resulting in an adjusted ROE of 9.6% [4] - Cumulative distributions for fiscal year 2025 totaled $1.65 per share, representing 10.9% of end-of-year net asset value per share [4] - The net asset value per share at the end of fiscal year 2025 was $14.97, which is $0.34 above the net asset value per share at its IPO in 2010 [5] Business Line Data and Key Metrics Changes - Approximately 90% of GBDC's investment portfolio at fair value remains in the highest-performing internal rating categories [11] - The investment income yield was 10.4%, a sequential decline of 20 basis points, primarily due to a modest decline in weighted average base rates and portfolio spread compression [12] - The weighted average rate on new investments was 8.9%, a decline of 30 basis points from the prior quarter [19] - The investment portfolio decreased to just under $8.8 billion at fair value, with $371 million in repayments and exits, net of $60 million in new investment commitments [13] Market Data and Key Metrics Changes - The direct lending market is facing headwinds, including narrowed spreads and a credit cycle characterized by an unusual level of defaults and credit stress [6][7] - The default rate in the broadly syndicated market is currently running at about two and a half times historical average levels [27] - Non-accrual investments decreased to 0.3% of the total investment portfolio at fair value, remaining well below the BDC peer industry average [11][22] Company Strategy and Development Direction - GBDC's investment strategy focuses on providing first-lien senior-secured loans to middle-market companies backed by strong private equity sponsors [3] - The company aims to maintain a stable net asset value per share, minimize excise taxes, adjust base distribution levels infrequently, and pay a high dividend yield on NAV sustainably [9] - GBDC plans to approach the dividend question with caution, revisiting its policy early next year based on the outlook for rates and asset spreads [8] Management's Comments on Operating Environment and Future Outlook - The U.S. economy shows surprising resilience, with solid year-over-year growth in revenues and EBITDA across the portfolio, although there are signs of weakness in the lower-end consumer [26] - Elevated credit stress is expected to persist, impacting different BDCs in varying ways, leading to a widening gap between successful and struggling managers [27][28] - The company believes that private credit, when executed correctly, is a stable investment strategy that has historically produced low credit losses and strong returns [30][31] Other Important Information - GBDC's liquidity position remains strong, ending the quarter with approximately $1.2 billion of liquidity from unrestricted cash and drawn commitments [25] - The company repurchased 368,000 shares during the quarter, bringing total repurchases for the fiscal year to 2.9 million shares valued at $40.6 million [17] Q&A Session Summary Question: Availability of co-invest - GBDC has not seen any meaningful change in the availability or quality of equity co-invest opportunities over the past years, maintaining a strong track record in this area [33][34] Question: Economic themes and inflation - There is optimism regarding capital spending due to recent provisions, but concerns exist regarding the stress on the subprime consumer, with increased delinquencies and reduced spending observed [40][41] Question: Spread compression risks - The compression of spreads is not solely due to supply and demand imbalances but reflects broader investor sentiment. A reset in investor confidence would be necessary for spreads to change significantly [42][43]

Financial Data and Key Metrics Changes - For Q4 2025, adjusted net investment income (NII) per share was $0.39, with an adjusted NII return on equity (ROE) of 10.4% [4] - Adjusted net income per share was $0.36, resulting in an adjusted ROE of 9.6% [4] - Cumulative distributions for fiscal year 2025 totaled $1.65 per share, representing 10.9% of end-of-year net asset value per share [4] - The net asset value (NAV) per share at the end of fiscal year 2025 was $14.97, which is 34 cents above the IPO NAV in 2010 [5] Business Line Data and Key Metrics Changes - Approximately 90% of GBDC's investment portfolio remains in the highest-performing internal rating categories [11] - The investment income yield was 10.4%, a sequential decline of 20 basis points [12] - The weighted average rate on new investments was 8.9%, a decline of 30 basis points from the prior quarter [18] - The investment portfolio decreased to just under $8.8 billion at fair value, with $371 million in repayments and exits [13] Market Data and Key Metrics Changes - The private credit direct lending market is facing headwinds, including narrowed spreads and a credit cycle with elevated defaults [6][26] - The default rate in the broadly syndicated market is currently about two and a half times historical average levels [26] - GBDC's effective borrowing costs decreased to 5.6% annualized, which is considered industry-leading [13] Company Strategy and Development Direction - GBDC's investment strategy focuses on providing first-lien senior-secured loans to middle-market companies backed by strong private equity sponsors [3] - The company aims to maintain a stable NAV per share, minimize excise taxes, and adjust its base distribution level infrequently [9] - GBDC plans to revisit its dividend policy early next year based on the outlook for rates and asset spreads [8] Management's Comments on Operating Environment and Future Outlook - The U.S. economy shows resilience, but there are signs of weakness, particularly among lower-end consumers [25] - Elevated credit stress is expected to persist, impacting different BDCs in varying ways [26] - The company believes that the current environment may allow private credit specialists to outperform [10] Other Important Information - GBDC's liquidity position remains strong, ending the quarter with approximately $1.2 billion in liquidity [24] - The company repurchased 368,000 shares during the quarter, totaling 2.9 million shares for the fiscal year [16] Q&A Session Summary Question: Availability of co-invest - GBDC has not seen any meaningful change in the availability or quality of equity co-invest opportunities over the past years [31][32] Question: Themes in the economy - There is optimism regarding capital spending due to tax provisions, but concerns exist about the subprime consumer facing stress [39] Question: Spread compression risks - The compression of spreads is widespread across various debt categories, and a change in investor sentiment would be necessary for spreads to move higher [40][41]

Group 1 - The article does not provide any specific content related to a company or industry [1]

Financial Performance - Adjusted net investment income per share remained solid at $0.39, resulting in an adjusted NII ROE of 10.4%[10] - Adjusted earnings per share were $0.36, translating to an adjusted ROE of 9.6%[10] - The company declared a quarterly base distribution of $0.39 per share for FY 2026 Q1, with distribution coverage remaining strong at approximately 100%[10] - Net asset value decreased slightly to $14.97 per share, a decrease of $0.03 from the previous quarter[10] Portfolio & Credit Quality - The investment portfolio at fair value totaled $8.8 billion, with $370.8 million in exits/sales and $86.5 million in new investment commitments[10] - Approximately 90% of the total investment portfolio maintained internal performance ratings of '4' or '5', indicating continued strong portfolio company performance[10, 42] - Non-accrual investments decreased to 0.3% of total investments at fair value (0.6% at cost)[10] Balance Sheet & Liquidity - The GAAP debt-to-equity ratio, net, decreased to 1.23x[10] - The weighted average cost of debt was 5.6%[10] - Total available liquidity stood at $1.2 billion[10] Capital Allocation - The company repurchased 0.4 million shares for $5.2 million at an average price of $14.02 per share, representing 94% of net asset value[10]

分组1 - Golub Capital BDC reported quarterly earnings of $0.39 per share, matching the Zacks Consensus Estimate, but down from $0.47 per share a year ago [1] - The company posted revenues of $217.84 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 1.24% and down from $224.41 million year-over-year [2] - The stock has underperformed the market, losing about 10.2% since the beginning of the year compared to the S&P 500's gain of 13.4% [3] 分组2 - The earnings outlook for Golub Capital BDC is uncertain, with current consensus EPS estimates at $0.38 for the coming quarter and $1.47 for the current fiscal year [7] - The Zacks Industry Rank places the Financial - SBIC & Commercial Industry in the bottom 18% of over 250 Zacks industries, indicating potential challenges for stocks in this sector [8] - The estimate revisions trend for Golub Capital BDC was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6]

Core Insights - The article focuses on Golub Capital BDC (GBDC), a business development company that has been underperforming in the market [1]. Group 1: Company Overview - Golub Capital BDC is highlighted as a "beaten-down" business development company, indicating potential investment opportunities due to its current valuation [1]. Group 2: Investment Strategy - The article mentions the investment approach of Denislav Iliev, who leads a team of analysts identifying mispriced investments in fixed-income and closed-end funds [1]. - The service provided by Denislav's group includes frequent picks for mispriced preferred stocks and baby bonds, along with weekly reviews of over 1200 equities [1].