The Finance group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Golub Capital BDC (GBDC) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Finance peers, we might be able to answer that question. Golub Capital BDC is a member of our Finance group, which includes 854 differen ...

Klaus Vedfelt Golub Capital BDC Inc. (NASDAQ:GBDC) is selling for a reasonable 8% premium to net asset value considering the strength of the business development company's underlying excess dividend coverage and adjusted net investment income growth. Golub Capital BDC paid out only 84% of its adjusted net investment income in the last year and has consistently distributed excess portfolio income as special dividends. I think that the 8% for Golub Capital is reasonable considering that the business developme ...

Jonathan Kitchen 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 3.8% total NAV return. It trades at a 10.5% total dividend yield and a 13 premium to book. Its net income yield is 11.9% - in line with the sector median. 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. Quarter U ...

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 ...

Financial Data and Key Metrics Changes - GBDC reported an adjusted net investment income (NII) per share of $0.51, the highest quarterly adjusted NII per share to date, with an adjusted NII return on equity (ROE) of 13.5% on an annualized basis [14][21] - Adjusted earnings per share reached $0.55, corresponding to an adjusted ROE of 14.6% on an annualized basis [17][21] - Net asset value (NAV) per share increased by $0.09 to $15.12, representing a 2.65% increase year-over-year [17][23] - The distribution coverage ratio was 131% on the increased regular quarterly distribution of $0.39 per share [24] Business Line Data and Key Metrics Changes - Approximately 87% of GBDC's investments were rated 4 or 5, indicating performance as expected or better, while loans rated 1 and 2, which are likely to see significant credit impairment, remained low at 50 basis points of the portfolio [2] - The proportion of loans rated 3 decreased from 13.7% to 12.3% sequentially [2] Market Data and Key Metrics Changes - The investment income yield increased modestly by 20 basis points to 12.8% [7] - The cost of debt increased by 10 basis points to 5.5%, while the weighted average net investment spread increased slightly to 7.3% [30][32] Company Strategy and Development Direction - GBDC's strategy focuses on core middle market companies rather than large companies, which is seen as a competitive advantage in the current market environment [3] - The company anticipates that origination strength will become a larger source of differentiation among managers [5] - GBDC is positioned to benefit from the pending merger with GBDC 3, which is expected to close in the second calendar quarter of 2024 [18][35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about GBDC's resilience post-merger, despite challenges in the broader market, including spread compression and slow M&A activity [3][36] - The company noted that while the M&A market is recovering, it is still weak compared to historical norms [36] - Management highlighted the importance of maintaining discipline in originations to avoid pressure to accept unattractive risk-reward situations [74] Other Important Information - GBDC's liquidity position remains strong, with approximately $1.9 billion in liquidity from unrestricted cash and undrawn commitments [34] - The company has reduced its base management fee from 1.375% to 1% per annum, effective July 1, 2023, which is expected to enhance shareholder alignment [18] Q&A Session Summary Question: Comments on spread compression - Management noted that spread compression is more pronounced in the larger market, with a range of 50 to 100 basis points observed [64][79] Question: Trends in credit quality - Management indicated that the recent non-accruals were small and did not reflect a broader trend, with challenges primarily in healthcare and software sectors [68][69] Question: Changes in portfolio yield - The weighted average upfront fee decreased slightly, and management acknowledged that borrower-friendly conditions are impacting documentation and structure [70][72]

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)

[Summary of Financial Results](index=3&type=section&id=Summary%20of%20Financial%20Results) This section provides an overview of GBDC's financial performance, highlighting key earnings, portfolio, and balance sheet metrics [Q2 FY2024 Earnings Review](index=4&type=section&id=FY%202024%20Q2%20Earnings%20Review%20%28Quarter%20Ended%203%2F31%2F24%29) GBDC reported strong Q2 FY2024 earnings with Adjusted NII per share of $0.51, driving NAV growth to $15.12 and total distributions of $0.45 Q2 FY2024 Key Performance Indicators | Category | Metric | Value/Observation | | :--- | :--- | :--- | | **Earnings** | Adjusted NII per share | $0.51 (up $0.01 QoQ, up $0.09 YoY) | | | Adjusted Earnings per share | $0.55 (Adjusted ROE over 14%) | | **Portfolio & Credit** | New Investment Commitments | $22.1 million | | | Credit Quality | Non-accruals decreased to 0.9% of total debt investments at fair value | | **Balance Sheet** | Net Asset Value (NAV) per share | $15.12 (up $0.09 from prior quarter) | | | Net Debt-to-Equity | 1.15x | | | Total Available Liquidity | $1.9 billion | | **Dividends** | Declared Quarterly Distribution (Q3) | $0.39 per share | | | Declared Supplemental Distribution (Q2) | $0.06 per share | | | Total Announced Distributions | $0.45 per share | [Financial Results vs. Prior Quarter](index=5&type=section&id=Summary%20of%20Financial%20Results%20vs.%20Prior%20Quarter) This section reconciles GAAP to Adjusted financial measures for Q2 FY2024 versus Q1 FY2024, detailing key income and gain components Q2 FY24 vs Q1 FY24 Per Share Results Comparison | Metric | Q1 2024 (ended 12/31/23) | Q2 2024 (ended 3/31/24) | | :--- | :--- | :--- | | **Adjusted Net Investment Income** | **$0.50** | **$0.51** | | Net Realized/Unrealized Gain (Loss) | ($0.04) | $0.05 | | **Adjusted Earnings (Loss)** | **$0.45** | **$0.55** | | Net Asset Value | $15.03 | $15.12 | [GBDC Performance Drivers](index=6&type=section&id=GBDC%20Performance%20Drivers) This section analyzes the key factors influencing GBDC's financial performance, including NAV changes, quarterly trends, and portfolio characteristics [NAV Per Share Bridge Analysis](index=7&type=section&id=NII%20Drove%20a%20NAV%20Per%20Share%20Increase%20from%20December%2031%2C%202023) NAV per share increased by $0.09 to $15.12, primarily driven by Adjusted Net Investment Income of $0.51 per share, offsetting distributions - The NAV per share bridge illustrates that the **$0.51** in Adjusted NII was the primary contributor to NAV growth, partially offset by **$0.46** in total distributions paid and a net realized/unrealized gain of **$0.04**[15](index=15&type=chunk)[16](index=16&type=chunk) [Summary of Quarterly Results](index=8&type=section&id=Summary%20of%20Quarterly%20Results) The company shows consistent performance with Adjusted NII per share increasing and NAV per share growing over the past five quarters Per Share Performance Trend (Last 5 Quarters) | Quarter Ended | Adjusted NII | Adjusted Earnings | NAV | Distributions Paid | | :--- | :--- | :--- | :--- | :--- | | Mar 31, 2023 | $0.42 | $0.34 | $14.73 | $0.33 | | Jun 30, 2023 | $0.44 | $0.43 | $14.83 | $0.33 | | Sep 30, 2023 | $0.50 | $0.60 | $15.02 | $0.41 | | Dec 31, 2023 | $0.50 | $0.45 | $15.03 | $0.44 | | Mar 31, 2024 | $0.51 | $0.55 | $15.12 | $0.46 | [Portfolio Highlights](index=10&type=section&id=Portfolio%20Highlights) The portfolio is defensively positioned with $5.4 billion in first lien, senior secured loans, showing strong credit quality [New Originations and Portfolio Rotation](index=10&type=section&id=Portfolio%20Highlights%20-%20New%20Originations) New investment commitments in Q2 2024 were $22.1 million, primarily One Stop loans, with positive portfolio rotation from higher rates on new investments Q2 FY2024 Origination and Rotation | Metric | Q2 2024 (ended 3/31/24) | | :--- | :--- | | New Investment Commitments | $22.1M | | Exits and Sales of Investments | $121.1M | | Net Funds Reduction | ($49.0M) | | W.A. Rate on New Investments | 11.0% | | W.A. Rate on Paid-off Investments | 10.4% | [Investment Mix and Diversity](index=11&type=section&id=Portfolio%20Highlights%20%E2%80%93%20Investment%20Mix) The $5.4 billion portfolio is highly diversified across 366 companies, primarily in First Lien and One Stop floating rate loans - The portfolio is heavily weighted towards senior secured debt, with **93%** in First Lien loans[30](index=30&type=chunk) - **99%** of the loan portfolio is floating rate, providing a natural hedge in a rising rate environment[30](index=30&type=chunk) - The portfolio is diversified across **366** companies with an average investment size of **0.3%**[29](index=29&type=chunk) [Economic Analysis and Spreads](index=13&type=section&id=Portfolio%20Highlights%20%E2%80%93%20Economic%20Analysis) The quarter's investment income yield was 11.9% with a weighted average cost of debt of 5.5%, yielding a strong net investment spread of 6.4% Key Yields and Spreads (Q2 2024) | Metric | Value | | :--- | :--- | | Investment income yield | 11.9% | | Weighted average cost of debt | 5.5% | | Weighted average net investment spread | 6.4% | | 3-Month SOFR | 5.3% | [Credit Quality and Portfolio Ratings](index=14&type=section&id=Portfolio%20Highlights%20-%20Credit%20Quality) Credit quality remained strong with non-accrual investments decreasing to 0.9% and over 87% of the portfolio performing as expected Non-Accrual Investment Trend (at Fair Value) | Quarter Ended | Non-Accrual % of Total Debt | | :--- | :--- | | Mar 31, 2023 | 1.7% | | Jun 30, 2023 | 1.5% | | Sep 30, 2023 | 1.2% | | Dec 31, 2023 | 1.1% | | Mar 31, 2024 | 0.9% | - As of March 31, 2024, **87.4%** of the portfolio at fair value had an internal performance rating of 4 or 5, indicating strong fundamental credit quality[38](index=38&type=chunk)[39](index=39&type=chunk) [Financial Statements](index=16&type=section&id=Financial%20Statements) This section presents GBDC's key financial statements, including the balance sheet and income statement, for the reported period [Quarterly Statements of Financial Condition](index=16&type=section&id=Quarterly%20Statements%20of%20Financial%20Condition) As of March 31, 2024, GBDC's total assets were $5.7 billion, with investments at $5.4 billion, resulting in NAV per share of $15.12 Balance Sheet Summary (as of March 31, 2024) | Account | Amount (in thousands) | | :--- | :--- | | Total Investments, at fair value | $5,394,737 | | Total Assets | $5,699,890 | | Total Debt | $3,032,400 | | Total Liabilities | $3,135,998 | | **Total Net Assets** | **$2,563,892** | | **Net Asset Value per Share** | **$15.12** | | GAAP debt-to-equity, net | 1.15x | [Quarterly Operating Results](index=17&type=section&id=Quarterly%20Operating%20Results) For Q2 FY2024, GBDC generated $165.3 million in total investment income, resulting in $85.4 million Net Investment Income after tax Income Statement Summary (for Quarter Ended March 31, 2024) | Account | Amount (in thousands) | | :--- | :--- | | Total Investment Income | $165,339 | | Total Expenses | $80,000 | | **Net Investment Income after Tax** | **$85,339** | | Net Gain on Investments | $9,362 | | **Net Increase in Net Assets** | **$94,701** | | **Earnings Per Share** | **$0.55** | | Adjusted NII Per Share | $0.51 | [Shareholder Returns and Performance](index=18&type=section&id=Shareholder%20Returns%20and%20Performance) This section highlights GBDC's commitment to shareholder value through consistent distributions and strong long-term returns [Historical Financial Performance](index=18&type=section&id=Financial%20Performance%20Highlights) GBDC demonstrates a consistent track record of delivering returns, with regular and supplemental distributions enhancing shareholder return - The company has consistently paid and grown its regular quarterly distribution over the past five years, adding supplemental distributions in recent periods of strong earnings[47](index=47&type=chunk) [Long-Term Shareholder Returns](index=19&type=section&id=Long%20History%20of%20Strong%20Shareholder%20Returns) Since its 2010 IPO, GBDC has generated a 9.5% IRR on NAV for initial investors, driven by NAV growth and distributions - Investors in GBDC's 2010 IPO have achieved a **9.5%** IRR on NAV, demonstrating strong long-term value creation[52](index=52&type=chunk) - The total return to shareholders is composed of NAV per share appreciation combined with cumulative regular, special, and supplemental distributions[51](index=51&type=chunk) [Liquidity and Capital Structure](index=20&type=section&id=Liquidity%20and%20Capital%20Structure) This section details GBDC's financial flexibility, including its available liquidity, debt funding mix, and investment-grade credit ratings [Liquidity and Investment Capacity](index=20&type=section&id=Liquidity%20and%20Investment%20Capacity) As of March 31, 2024, GBDC had $1.9 billion in total available liquidity, actively managing its balance sheet - Total available liquidity was approximately **$1.9 billion** as of March 31, 2024, from cash and undrawn credit facilities[9](index=9&type=chunk)[54](index=54&type=chunk) - In February 2024, the company issued **$600.0 million** of 6.248% Unsecured Notes due 2029 and entered into an interest rate swap to convert the fixed rate to a floating rate[54](index=54&type=chunk) - Subsequent to quarter-end, on April 8, 2024, the company redeemed **$500 million** of its 3.375% Notes due in 2024[54](index=54&type=chunk) [Debt Capital Structure and Ratings](index=21&type=section&id=GBDC%20Has%20a%20Stable%2C%20Highly%20Flexible%20and%20Low-Cost%20Funding%20Structure) GBDC maintains a stable, flexible funding structure with a 5.5% weighted average cost of debt and investment-grade ratings - **66%** of debt funding is from unsecured notes, providing financial flexibility[57](index=57&type=chunk) - The company holds investment-grade credit ratings from three major agencies: Fitch (**BBB**), Moody's (**Baa3**), and S&P (**BBB-**)[56](index=56&type=chunk) Debt Capital Structure Summary (as of March 31, 2024) | Funding Source | Debt Commitment ($M) | Outstanding Par ($M) | | :--- | :--- | :--- | | Securitizations | $814.3 | $814.3 | | Unsecured Notes | $2,500.0 | $2,500.0 | | Bank Facilities | $1,587.5 | $0.0 | | **Totals** | **$4,901.8** | **$3,314.3** | [Common Stock and Distributions](index=22&type=section&id=Common%20Stock%20and%20Distribution%20Information) This section provides details on GBDC's common stock performance and its distribution policies, including the supplemental distribution framework [Common Stock Price and Distribution History](index=22&type=section&id=Common%20Stock%20Price%20Data) The report details recent stock prices and declared distributions, including quarterly and supplemental amounts for Q2 FY2024 Recent Distributions Declared | Type | Amount Per Share | Record Date | Payment Date | | :--- | :--- | :--- | :--- | | Quarterly | $0.39 | March 1, 2024 | March 29, 2024 | | Quarterly | $0.39 | May 2, 2024 | June 21, 2024 | | Supplemental | $0.06 | May 16, 2024 | June 14, 2024 | [Supplemental Distribution Framework](index=23&type=section&id=Quarterly%20Variable%20Supplemental%20Distribution%20Framework) The company outlines its framework for calculating the quarterly variable supplemental distribution based on prior quarter's excess adjusted NII Calculation for Q2 FY24 Supplemental Distribution (based on Q1 FY24 results) | Description | Value per Share | | :--- | :--- | | Q1 FY24 Adjusted NII | $0.50 | | (-) Q1 FY24 Quarterly Distribution Paid | ($0.37) | | Excess Adjusted NII | $0.13 | | (x) 50% of Excess | $0.065 | | **Quarterly Variable Supplemental Distribution** | **$0.07** (rounded) | [Appendix](index=24&type=section&id=Appendix%3A%20Endnotes) This section contains supplementary information, including endnotes, definitions, and detailed reconciliations of financial measures [Endnotes](index=25&type=section&id=Endnotes) The appendix provides detailed endnotes, definitions, and reconciliations for non-GAAP financial measures and debt capital structure - This section provides definitions and reconciliations for non-GAAP financial measures, which are adjusted to exclude the financial impact of the purchase premium from the 2019 GCIC acquisition[73](index=73&type=chunk)[77](index=77&type=chunk) - Detailed footnotes are provided for the economic analysis, clarifying the calculation of metrics like investment income yield and weighted average cost of debt[78](index=78&type=chunk)[80](index=80&type=chunk) - The endnotes offer specific details on the debt capital structure, including terms of unsecured notes, credit facilities, and associated interest rate swap agreements[81](index=81&type=chunk)[83](index=83&type=chunk)

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