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 ...

Part I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Golub Capital BDC, Inc.'s financial statements detail its December 31, 2023 position and operational results, showing slight asset decrease, increased net assets, and improved income [Consolidated Statements of Financial Condition](index=4&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) As of December 31, 2023, total assets slightly decreased to **$5.70 billion**, while total net assets increased to **$2.56 billion**, with NAV per share rising to **$15.03** Financial Condition Highlights (as of) | Metric | December 31, 2023 | September 30, 2023 | | :--- | :--- | :--- | | Total Investments, at fair value | $5,443.4 million | $5,516.6 million | | Total Assets | $5,699.9 million | $5,733.5 million | | Total Liabilities | $3,136.0 million | $3,185.6 million | | Total Net Assets | $2,563.9 million | $2,547.9 million | | Net Asset Value per common share | $15.03 | $15.02 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For Q4 2023, total investment income increased to **$164.8 million**, with net investment income after tax rising to **$83.5 million**, and net assets increasing by **$75.8 million** Statement of Operations Highlights (Three months ended December 31) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Total Investment Income | $164.8 million | $136.9 million | | Total Expenses | $80.7 million | $73.0 million | | Net Investment Income - after tax | $83.5 million | $61.7 million | | Net gain (loss) on investment transactions | $(7.7) million | $(36.3) million | | Net Increase in Net Assets | $75.8 million | $25.6 million | | Basic and diluted EPS | $0.45 | $0.15 | [Consolidated Statements of Changes in Net Assets](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net assets increased by **$16.0 million** for the quarter ended December 31, 2023, driven by **$75.8 million** from operations, partially offset by **$74.6 million** in distributions Changes in Net Assets (Three months ended December 31, 2023) | Description | Amount (in thousands) | | :--- | :--- | | Balance at September 30, 2023 | $2,547,878 | | Net increase from operations | $75,776 | | Stock issued via dividend reinvestment plan | $14,886 | | Distributions from distributable earnings | $(74,622) | | **Balance at December 31, 2023** | **$2,563,918** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was **$163.6 million** for Q4 2023, leading to a **$32.8 million** net increase in cash and cash equivalents despite **$130.8 million** used in financing Cash Flow Summary (Three months ended December 31) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $163.6 million | $52.9 million | | Net cash used in financing activities | $(130.8) million | $(67.5) million | | **Net change in cash and cash equivalents** | **$32.8 million** | **$(14.6) million** | [Consolidated Schedule of Investments](index=9&type=section&id=Consolidated%20Schedule%20of%20Investments) As of December 31, 2023, the **$5.44 billion** investment portfolio, comprising 357 companies, is primarily **85.7%** one stop loans and **8.1%** senior secured loans Investment Portfolio Composition by Type (as of Dec 31, 2023) | Investment Type | Fair Value (in thousands) | Percentage of Total | | :--- | :--- | :--- | | Senior secured | $438,837 | 8.1% | | One stop | $4,662,636 | 85.7% | | Second lien | $32,449 | 0.6% | | Subordinated debt | $8,444 | 0.2% | | Equity | $301,061 | 5.4% | | **Total** | **$5,443,427** | **100.0%** | - The total investment portfolio consisted of investments in **357 portfolio companies** as of December 31, 2023[427](index=427&type=chunk) Investment Portfolio by Control Type (as of Dec 31, 2023) | Category | Fair Value (in thousands) | | :--- | :--- | | Non-controlled/non-affiliate | $5,351,550 | | Non-controlled affiliate | $79,073 | | Controlled affiliate | $12,804 | | **Total Investments** | **$5,443,427** | [Notes to Consolidated Financial Statements](index=97&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, the **$5.44 billion** investment portfolio, **$3.08 billion** debt structure, and subsequent events including a proposed merger and new **$600 million** unsecured note issuance - The company is an externally managed, closed-end, non-diversified management investment company regulated as a **Business Development Company (BDC)** and a **Regulated Investment Company (RIC)**[242](index=242&type=chunk) - Effective July 1, 2023, the base management fee paid to the Investment Adviser was reduced from **1.375% to 1.0%** of average adjusted gross assets[288](index=288&type=chunk) - Subsequent to quarter-end, the company announced a proposed merger with Golub Capital BDC 3, Inc., issued **$600 million** of **6.000% unsecured notes** due 2029, and declared a quarterly distribution of **$0.39 per share** plus a supplemental distribution of **$0.07 per share**[404](index=404&type=chunk)[411](index=411&type=chunk)[412](index=412&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=133&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights a stable quarter with a **$5.4 billion** investment portfolio, increased investment income, and key developments including a proposed merger and new **$600 million** bond issuance [Overview](index=140&type=section&id=Overview) Golub Capital BDC primarily invests in one stop and senior secured loans of U.S. middle-market companies, with its **$5.4 billion** portfolio largely composed of these debt types - The company's investment objective is to generate current income and capital appreciation by investing in U.S. middle-market companies, primarily through **one stop** and **senior secured loans**[419](index=419&type=chunk) Portfolio Composition by Investment Type (as of Dec 31, 2023) | Investment Type | Fair Value (in thousands) | Percentage of Total | | :--- | :--- | :--- | | Senior secured | $438,837 | 8.1% | | One stop | $4,662,636 | 85.7% | | Second lien | $32,449 | 0.6% | | Subordinated debt | $8,444 | 0.2% | | Equity | $301,061 | 5.4% | | **Total** | **$5,443,427** | **100.0%** | [Recent Developments](index=144&type=section&id=Recent%20Developments) Recent developments include a proposed merger with Golub Capital BDC 3, Inc., an incentive fee waiver, a new **$600 million** unsecured note issuance, and increased shareholder distributions - On January 16, 2024, the company entered into a merger agreement with **Golub Capital BDC 3, Inc. (GBDC 3)**[437](index=437&type=chunk) - The Investment Adviser agreed to waive incentive fees in excess of **15%** effective January 1, 2024, pending the merger with GBDC 3[438](index=438&type=chunk) - On February 1, 2024, the company issued **$600 million** of **6.000% unsecured notes** due 2029[439](index=439&type=chunk) - The Board declared a quarterly distribution of **$0.39 per share** and a supplemental distribution of **$0.07 per share**[439](index=439&type=chunk)[440](index=440&type=chunk) [Consolidated Results of Operations](index=144&type=section&id=Consolidated%20Results%20of%20Operations) Q4 2023 saw total investment income rise to **$164.8 million** and net investment income after tax increase to **$83.5 million**, with a reduced net loss on investments of **$7.7 million** Quarterly Operating Results Comparison (in thousands) | Metric | Q4 2023 | Q3 2023 | Q4 2022 | | :--- | :--- | :--- | :--- | | Total investment income | $164,770 | $164,540 | $136,877 | | Total expenses | $80,735 | $79,849 | $73,014 | | Net investment income after taxes | $83,535 | $83,441 | $61,663 | | Net gain (loss) on investments | $(7,736) | $18,391 | $(36,328) | | Net increase in net assets | $75,776 | $101,564 | $25,581 | - The base management fee decreased by **$5.1 million** year-over-year due to a rate reduction from **1.375% to 1.0%** effective July 1, 2023[460](index=460&type=chunk) - Net unrealized depreciation for Q4 2023 was **$8.8 million**, a significant improvement from **$39.6 million** in Q4 2022, driven by spread tightening and improved portfolio performance[468](index=468&type=chunk)[470](index=470&type=chunk)[471](index=471&type=chunk) [Liquidity and Capital Resources](index=150&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2023, the company maintained strong liquidity with **$70.7 million** cash and **$1.17 billion** available credit, alongside a **1.21x** GAAP debt-to-equity ratio - As of December 31, 2023, the company had **$70.7 million** in cash and cash equivalents and **$1,167.8 million** of availability on its JPM Credit Facility[474](index=474&type=chunk)[475](index=475&type=chunk) - The asset coverage ratio was **182.4%**, and the GAAP debt-to-equity ratio was **1.21x** as of December 31, 2023[486](index=486&type=chunk) - Outstanding commitments to fund investments totaled **$163.9 million** as of December 31, 2023[488](index=488&type=chunk) [Portfolio Composition, Investment Activity and Yield](index=154&type=section&id=Portfolio%20Composition%2C%20Investment%20Activity%20and%20Yield) The **$5.4 billion** investment portfolio, with **357** companies, saw **$58.6 million** in new commitments, a **12.2%** weighted average income yield, and **1.1%** non-accrual loans New Investment Commitments (by Quarter) | Investment Type | Q4 2023 (in thousands) | Percentage | | :--- | :--- | :--- | | Senior secured | $7,500 | 12.8% | | One stop | $49,317 | 84.1% | | Equity & Other | $1,827 | 3.1% | | **Total** | **$58,644** | **100.0%** | - The weighted average income yield on earning portfolio investments for the quarter was **12.2%**, up from **10.0%** in the prior year quarter[428](index=428&type=chunk) Portfolio Quality by Internal Rating (as of Dec 31, 2023) | Rating | Definition | % of Portfolio (Fair Value) | | :--- | :--- | :--- | | 5 | Performing above expectations | 2.6% | | 4 | Performing as expected | 83.3% | | 3 | Performing below expectations | 13.7% | | 2 | Performing materially below | 0.4% | | 1 | Substantially below / Impaired | 0.0% | - As of December 31, 2023, non-accrual investments represented **1.1%** of the total debt portfolio at fair value[495](index=495&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=160&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate risk, with a **100 basis point** increase or decrease in rates impacting annual net investment income by approximately **$38.4 million** Interest Rate Sensitivity Analysis (Annualized Impact) | Change in Interest Rates | Net Increase (Decrease) in Investment Income | | :--- | :--- | | Up 100 basis points | $38,419 thousand | | Down 100 basis points | $(38,419) thousand | - As of December 31, 2023, **97.9%** of the loan portfolio at fair value was subject to an interest rate floor, providing some protection against falling rates[452](index=452&type=chunk) [Controls and Procedures](index=161&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of December 31, 2023, with no material changes to internal controls over financial reporting during the quarter - Management concluded that disclosure controls and procedures were **effective** as of the end of the period covered by the report[542](index=542&type=chunk) - No changes in internal controls over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[543](index=543&type=chunk) Part II [Legal Proceedings](index=162&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings that would adversely affect its financial statements - The company is not currently subject to any **material legal proceedings**[545](index=545&type=chunk) [Risk Factors](index=162&type=section&id=Item%201A.%20Risk%20Factors) New risk factors relate to the proposed merger with Golub Capital BDC 3, Inc., including potential stock price declines, ownership dilution, and failure to realize anticipated benefits - New risk factors have been introduced related to the proposed merger with **Golub Capital BDC 3, Inc. (GBDC 3)**[546](index=546&type=chunk)[548](index=548&type=chunk) - Merger-related risks include potential stock price declines from post-merger share sales, **dilution of ownership** for existing stockholders, and the risk of not achieving anticipated synergies and cost savings[548](index=548&type=chunk)[549](index=549&type=chunk)[552](index=552&type=chunk) [Other Items (Items 2, 3, 4, 5 & 6)](index=165&type=section&id=Other%20Items) The company reported no unregistered equity sales, senior security defaults, mine safety disclosures, or Rule 10b5-1 trading plan adoptions/terminations during the quarter - There were no **unregistered sales of equity securities**, defaults upon senior securities, or mine safety disclosures to report[564](index=564&type=chunk)[565](index=565&type=chunk)[566](index=566&type=chunk) - No directors or executive officers adopted or terminated any **Rule 10b5-1 trading plans** during the fiscal quarter ended December 31, 2023[567](index=567&type=chunk)

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]

Financial Performance - Adjusted net investment income per share was $0.50, resulting in a 13.3% NII ROE [10] - Adjusted earnings per share reached $0.60, representing a 16.0% Adjusted ROE [10] - Adjusted net realized/unrealized gain per share was $0.10 [10] - Net asset value per share increased by 1.3% from $14.83 as of June 30, 2023, to $15.02 [10] Portfolio & Credit Quality - New investment commitments totaled $129.6 million, with $71.5 million funded at close [10] - Net funds reduction amounted to $8.4 million [10] - Non-accruals decreased to 1.2% of total debt investments at fair value [10] Distributions - A quarterly distribution of $0.37 per share was declared for FY 2024 Q1, with a strong distribution coverage of 135% [10] - A supplemental distribution for FY 2023 Q4 of $0.07 per share was declared [10] - Total announced distributions amounted to $0.44 per share, yielding an 11.7% dividend on the 9/30/23 NAV [10] Liquidity & Leverage - Total available liquidity stood at $873 million [10] - Leverage (net of available cash) was 1.21x, with 46% of the debt funding mix being unsecured debt [10]

TABLE OF CONTENTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ______________________________________________________________________________________________________ Form 10-K ______________________________________________________________________________________________________ (Mark One) ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2023 or For the transition period from to ____________________________ ...

| --- | --- | --- | --- | --- | --- | |-------------------|-------------------|--------------------|------------------|--------------|------------------------| | Date Declared | Record Date | Payment Date | Amount Per Share | Frequency | Total Amount (in 000s) | | August 6, 2021 | September 8, 2021 | September 29, 2021 | $0.29 | | Quarterly $49,055 | | November 19, 2021 | December 10, 2021 | December 30, 2021 | $0.30 | | Quarterly $51,008 | | February 4, 2022 | March 4, 2022 | March 29, 2022 | $0.30 | | Qua ...

Golub Capital BDC (NASDAQ:GBDC) Q3 2023 Earnings Conference Call August 8, 2023 11:00 AM ET Company Participants David Golub - CEO Chris Ericson - CFO & Treasurer Matt Benton - COO Conference Call Participants Robert Dodd - Raymond James Ryan Lynch - KBW Operator Hello, everyone, and welcome to GBDC's June 30, 2023 Quarterly Earnings Call. Before we begin, I'd like to take a moment to remind our listeners that remarks made during this call may contain forward-looking statements within the meaning of the Pri ...

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 June 30, 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, In ...

Golub Capital BDC (NASDAQ:GBDC) Q2 2023 Earnings Conference Call May 9, 2023 11:00 AM ET Company Participants David Golub - Chief Executive Officer Matt Benton - Chief Operating Officer Chris Ericson - Chief Financial Officer Conference Call Participants Raymond Cheesman - Anfield Capital Ryan Lynch - KBW Robert Dodd - Raymond James Jordan Wathen - Wells Fargo Operator Hello everyone and welcome to GBDC's March 31, 2023 Quarterly Earnings Call. Before we begin, I'd like to take a moment to remind our listen ...

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 March 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, I ...