Hiroshi Watanabe This will be my third article on Golub Capital BDC (NASDAQ:GBDC) since the publication of my initial bull thesis back in late 2023. After I issued the first article, I made a follow-up piece assessing Q1, 2024 performance, which clearly confirmed the identified strengths of GBDC and its cash generation power to accommodate stable dividends going forward. Just to quickly reminder you, these are the main drivers of bull thesis here: GBDC is the sixth largest BDC in terms of the value of ...

18 Apr-10Jun-10Sep-10Dec-10Mar-11Jun-11Sep-11Dec-11Mar-12Jun-12Sep-12Dec-12Mar-13Jun-13Sep-13Dec-13Mar-14Jun-14Sep-14Dec-14Mar-15Jun-15Sep-15Dec-15Mar-16Jun-16Sep-16Dec-16Mar-17Jun-17Sep-17Dec-17Mar-18Jun-18Sep-18Dec-18Mar-19Jun-19Sep-19Dec-19Mar-20Jun-20Sep-20Dec-20Mar-21Jun-21Sep-21Dec-21Mar-22Jun-22Sep-22Dec-22Mar-23Jun-23Sep-23Dec-23Mar-24 19 – JPM Credit Facility – As of March 31, 2024, subject to leverage and borrowing base restrictions, we had $1,487.5 million of remaining commitments and availabilit ...

Golub Capital BDC (GBDC) came out with quarterly earnings of $0.51 per share, missing the Zacks Consensus Estimate of $0.52 per share. This compares to earnings of $0.42 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -1.92%. A quarter ago, it was expected that this business development company would post earnings of $0.51 per share when it actually produced earnings of $0.50, delivering a surprise of -1.96%.Over the last four ...

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited statements for the period ended March 31, 2024, show increased assets and NAV per share, improved net income, and detailed portfolio composition [Consolidated Statements of Financial Condition](index=3&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) Total assets grew to $5.94 billion and NAV per share increased to $15.12 as of March 31, 2024 Financial Condition (In thousands) | Financial Metric | March 31, 2024 | September 30, 2023 | | :--- | :--- | :--- | | Total Investments, at fair value | $5,394,737 | $5,516,613 | | Total Assets | $5,942,626 | $5,733,472 | | Total Liabilities | $3,348,986 | $3,185,594 | | Total Net Assets | $2,593,640 | $2,547,878 | | Net Asset Value per common share | $15.12 | $15.02 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Net increase in net assets from operations rose to $93.6 million for the quarter, a significant year-over-year improvement Results of Operations | Metric (In thousands, except per share data) | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | Six Months Ended Mar 31, 2024 | Six Months Ended Mar 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | Total investment income | $164,230 | $146,953 | $329,000 | $283,830 | | Net investment income - after tax | $86,533 | $70,206 | $170,068 | $131,869 | | Net increase in net assets from operations | $93,558 | $58,503 | $169,334 | $84,084 | | Basic and diluted EPS | $0.55 | $0.34 | $1.00 | $0.49 | - An incentive fee of **$5,157 thousand** was waived for the three and six months ended March 31, 2024, with no such waiver in the prior year periods[12](index=12&type=chunk) [Consolidated Statements of Changes in Net Assets](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Total net assets increased by $45.8 million to $2.59 billion, driven by operations and offset by distributions - Net assets increased from **$2,547,878 thousand** at September 30, 2023, to **$2,593,640 thousand** at March 31, 2024[14](index=14&type=chunk) - Key changes in net assets for the six months ended March 31, 2024 included: net investment income of **$170,068 thousand**, net realized loss of **$(12,722) thousand**, and distributions of **$(153,092) thousand**[14](index=14&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased significantly to $313.0 million, resulting in a total net cash increase of $322.0 million Cash Flow Summary | Cash Flow Activity (In thousands) | Six Months Ended Mar 31, 2024 | Six Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $313,014 | $82,703 | | Net cash provided by (used in) financing activities | $8,993 | $(125,656) | | Net change in cash and equivalents | $322,007 | $(42,953) | [Consolidated Schedules of Investments](index=8&type=section&id=Consolidated%20Schedules%20of%20Investments) The investment portfolio's fair value was $5.39 billion, concentrated in debt investments across diversified industries Investment Portfolio Summary (In thousands) | Investment Category | Fair Value (Mar 31, 2024) | Percentage of Net Assets | | :--- | :--- | :--- | | Non-controlled/non-affiliate company investments | $5,277,008 | 203.5% | | Non-controlled/affiliate company investments | $105,956 | 4.0% | | Controlled affiliate company investments | $11,773 | 0.5% | | **Total investments** | **$5,394,737** | **208.0%** | - The total amortized cost of the investment portfolio was **$5.44 billion** as of March 31, 2024, compared to a fair value of **$5.39 billion**, indicating a net unrealized depreciation[133](index=133&type=chunk) [Notes to Consolidated Financial Statements](index=98&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the pending GBDC 3 merger, a reduced management fee, debt composition, and subsequent events - On January 16, 2024, the Company entered into an Agreement and Plan of Merger with Golub Capital BDC 3, Inc, subject to stockholder approval and other closing conditions[250](index=250&type=chunk)[425](index=425&type=chunk) - Effective July 1, 2023, the base management fee rate was reduced from **1.375% to 1.0%** of average adjusted gross assets, and the Investment Adviser agreed to waive incentive fees in excess of **15%** pending the GBDC 3 merger[296](index=296&type=chunk)[308](index=308&type=chunk) - Subsequent to quarter-end, the Company redeemed all **$500 million** of its 3.375% Notes due 2024 and declared a quarterly distribution of **$0.39 per share** and a supplemental distribution of **$0.06 per share**[430](index=430&type=chunk)[432](index=432&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=137&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses performance, a $5.4 billion portfolio, strong credit quality, and the pending GBDC 3 merger [Overview](index=139&type=section&id=Overview) The company is an externally managed BDC investing in U.S. middle-market loans via the Golub Capital platform - The company's investment objective is to generate current income and capital appreciation by investing primarily in **one stop and other senior secured loans** of U.S. middle-market companies[440](index=440&type=chunk) - The investment strategy relies on accessing the loan origination channels of Golub Capital, which managed over **$65.0 billion** in capital as of January 1, 2024[440](index=440&type=chunk) [Recent Developments](index=145&type=section&id=Recent%20Developments) Post-quarter end, the company redeemed $500.0 million in notes and declared quarterly and supplemental distributions - On April 8, 2024, the company redeemed all **$500.0 million** of its 2024 Notes[459](index=459&type=chunk) - The Board declared a quarterly distribution of **$0.39 per share** and a supplemental distribution of **$0.06 per share**[461](index=461&type=chunk) [Consolidated Results of Operations](index=145&type=section&id=Consolidated%20Results%20of%20Operations) Q2 2024 net investment income was $86.5 million, with net assets increasing by $93.6 million due to gains and a fee waiver Quarterly and Six-Month Operational Results | Metric (In thousands) | Q2 2024 | Q1 2024 | 6 Months Ended Mar 31, 2024 | 6 Months Ended Mar 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | Total investment income | $164,230 | $164,770 | $329,000 | $283,830 | | Net expenses | $77,127 | $80,735 | $157,862 | $149,529 | | Net investment income after taxes | $86,533 | $83,535 | $170,068 | $131,869 | | Net gain (loss) on investments | $6,675 | $(7,736) | $(1,061) | $(48,076) | | Net increase in net assets | $93,558 | $75,776 | $169,334 | $84,084 | - The base management fee decreased year-over-year primarily due to the fee rate reduction to **1.0% from 1.375%** effective July 1, 2023[481](index=481&type=chunk) - The income incentive fee decreased quarter-over-quarter due to a **$5.2 million waiver** related to the pending GBDC 3 merger[483](index=483&type=chunk) [Liquidity and Capital Resources](index=152&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $292.8 million in cash and a debt-to-equity ratio of 1.28x - As of March 31, 2024, the company had **$292.8 million in cash** and cash equivalents and **$1.49 billion available** on its JPM Credit Facility[500](index=500&type=chunk)[501](index=501&type=chunk) - The asset coverage ratio was **177.9%**, and the GAAP debt-to-equity ratio was **1.28x**[515](index=515&type=chunk) - Outstanding commitments to fund investments totaled **$144.1 million** as of March 31, 2024[517](index=517&type=chunk) [Portfolio Composition, Investment Activity and Yield](index=156&type=section&id=Portfolio%20Composition%2C%20Investment%20Activity%20and%20Yield) The $5.4 billion portfolio is concentrated in one stop loans with a 12.4% yield and high credit quality Portfolio Overview | Metric | March 31, 2024 | September 30, 2023 | | :--- | :--- | :--- | | Total Investments at Fair Value | $5.4 billion | $5.5 billion | | Number of Portfolio Companies | 366 | 342 | | One Stop Loans (% of Total) | 85.3% | 84.8% | | Non-Accrual (% of Debt at Fair Value) | 0.9% | 1.2% | Internal Performance Ratings | Internal Performance Rating | % of Total Investments (Fair Value) | | :--- | :--- | | 5 (Least Risk) | 2.3% | | 4 (Performing as Expected) | 84.9% | | 3 (Performing Below Expectations) | 12.3% | | 2 (Materially Below Expectations) | 0.5% | | 1 (Substantially Below Expectations) | 0.0% | [Distributions](index=160&type=section&id=Distributions) The company makes quarterly distributions, has an "opt out" DRIP, and must distribute 90% of taxable income - The company has an **"opt out" dividend reinvestment plan (DRIP)**, meaning cash distributions are automatically reinvested unless a stockholder elects to receive cash[538](index=538&type=chunk) [Related Party Transactions](index=160&type=section&id=Related%20Party%20Transactions) Agreements with GC Advisors and the pending GBDC 3 merger constitute key related party transactions - Key related parties include **GC Advisors (Investment Adviser)** and **Golub Capital LLC (Administrator)**[539](index=539&type=chunk)[543](index=543&type=chunk) - GC Advisors has agreed to **waive incentive fees in excess of 15%** during the pendency of the GBDC 3 merger[539](index=539&type=chunk) - Potential conflicts of interest exist as GC Advisors manages other similar funds (GBDC 3, GDLC, etc.), which are addressed through an **allocation policy**[541](index=541&type=chunk) [Critical Accounting Policies](index=162&type=section&id=Critical%20Accounting%20Policies) Policies focus on the Board's fair value determination for Level 3 assets using methods like enterprise value analysis - The Board of Directors is solely responsible for the good faith determination of fair value for investments without readily available market quotations (**Level 3 assets**)[547](index=547&type=chunk) - The valuation process for Level 3 assets involves a **multi-step quarterly review** by GC Advisors, senior management, the audit committee, and at least one annual review by an independent valuation firm[547](index=547&type=chunk)[553](index=553&type=chunk) - Primary valuation methods for Level 3 investments include **enterprise value analysis** (using EBITDA multiples) and **market interest rate yield analysis**[554](index=554&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=165&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The primary market risk is interest rates, with a 100 bps rate change impacting net investment income by ~$35.2 million Interest Rate Sensitivity Analysis | Change in Interest Rates | Annualized Net Increase (Decrease) in Net Investment Income (In thousands) | | :--- | :--- | | Down 200 basis points | $(70,338) | | Down 100 basis points | $(35,169) | | Up 100 basis points | $35,169 | | Up 200 basis points | $70,338 | [Controls and Procedures](index=166&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Management concluded that **disclosure controls and procedures were effective** as of the end of the period covered by the report[573](index=573&type=chunk) - **No changes in internal controls** over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, such controls[574](index=574&type=chunk) [Part II. Other Information](index=167&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=167&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings - The company, its adviser, and affiliates are **not currently subject to any material legal proceedings**[576](index=576&type=chunk) [Risk Factors](index=167&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported for the quarter - **No material changes to risk factors** were reported for the three months ended March 31, 2024[577](index=577&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=167&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities were reported during the period - None[578](index=578&type=chunk) [Defaults Upon Senior Securities](index=167&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - None[579](index=579&type=chunk) [Mine Safety Disclosures](index=167&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - None[580](index=580&type=chunk) [Other Information](index=167&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading plans during the quarter - **No directors or executive officers adopted or terminated** any Rule 10b5-1 trading plans during the quarter[581](index=581&type=chunk) [Exhibits](index=168&type=section&id=Item%206.%20Exhibits) Filed exhibits include the GBDC 3 merger agreement, debt indentures, and officer certifications - Exhibits filed include the **GBDC 3 Merger Agreement**, a supplemental indenture for the **6.000% Notes due 2029**, and officer certifications[583](index=583&type=chunk)

GOLUB CAPITAL BDC, INC. EARNINGS PRESENTATION QUARTER ENDED MARCH 31, 2024 GOLUB CAPITAL Disclaimer Some of the statements in this presentation constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this presentation involve risks and uncertainties, including statements as to: our future operating results; our business prospects and the prospects of our portfolio companies, including our and their abi ...

8vFanI Rising interest rates have been a boon to Business Development Companies, known as BDC's, over the past 1 year-plus. Several of them have reported record earnings, including Golub Capital BDC (NASDAQ:GBDC), which saw 55% growth in Investment Income and 49% growth in Net Investment Income, NII in its fiscal year ending 9/30/23. 99% of its debt investments are at floating rates. Company Profile: Golub Capital BDC is an externally managed, closed-end, non-diversified management investment company th ...

Lemon_tm In this article, we catch up on the latest quarterly results of the Golub Capital BDC (NASDAQ:GBDC). The company delivered a good quarterly result with a 3.1% total NAV return. It trades at an 11.6% total dividend yield and a 5% premium to book. Its net income yield is 12.6%. The company's loan portfolio targets primarily floating-rate first-lien loans and is very well diversified with over 300 positions. Top sectors include software and healthcare. GBDC Quarter Update Adjusted net income for the q ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ______________________________________________________________________________________________________ FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended December 31, 2023 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 814-00794 Golub Capital BDC ...

Merger Overview - GBDC will acquire 100% of GBDC 3 in a stock-for-stock transaction, with the exchange ratio determined at merger close based on NAV and market price[109] - The combined company will have approximately $8.5 billion in total assets and investments in 343 portfolio companies[108] - The merger is expected to close in CQ2 2024, subject to stockholder approvals and customary conditions[108] Financial Benefits - The merger consideration structure provides an opportunity for NAV per share accretion at GBDC[109] - The incentive fee rate will be reduced to 15%, becoming permanent upon closing of the merger[108] - Potential annual operational synergies of approximately $1.2 million are expected from the elimination of duplicative expenses[9] Portfolio and Strategy - Over 99% of GBDC 3's portfolio company investments overlap with those of GBDC[9] - The investment strategy will remain consistent, focusing on first lien, senior secured loans[9] - Pro forma GAAP debt-to-equity is estimated to be approximately 1.10x[108] Fee Structure and NII - The incentive fee reduction from 20% to 15% is estimated to result in approximately $0.13 per share annually increase in adjusted net investment income[69] - The adjusted NII ROAE is estimated to increase to 14.3% with the 1% management fee and 15% incentive fee in effect[69]

Confidential | for discussion purposes only Disclaimer Summary of Financial Results 01 4 | --- | --- | --- | |------------------------------------------------------------------------------------------------|-------------------------------|--------------------| | | Quarter Ended \nJune 30, 2023 | September 30, 2023 | | Net Investment Income Per Share | | | | Net investment income per share | | $0.43 $0.49 | | Amortization of purchase premium per share 1 | | 0.01 0.01 | | Adjusted net investment income per sh ...