Kayne Anderson BDC, Inc.(KBDC) - 2024 Q2 - Quarterly Report

Investment Portfolio - As of June 30, 2024, the company had investments in 106 portfolio companies with an aggregate fair value of approximately $1,847 million and unfunded commitments of$179 million[219] - The portfolio consisted of 97.8% first lien senior secured loans, 1.2% subordinated debt, and 1.0% equity investments[219] - The average position size based on commitment was $19.3 million as of June 30, 2024[222] - The company had two debt investments on non-accrual status, representing 1.0$178.5 million in unfunded commitments to provide debt financing to portfolio companies as of June 30, 2024[258] Financial Performance - Total investment income for the three months ended June 30, 2024, was $52.4 million, up from$40.7 million in the same period of 2023, representing a 28.0% increase[236] - Net investment income for the six months ended June 30, 2024, was $58.1 million, compared to$41.0 million for the same period in 2023, reflecting a 41.5% increase[236] - Operating expenses for the three months ended June 30, 2024, totaled $22.6 million, an increase from$19.0 million in the same period of 2023, marking a 18.9% rise[238] - Interest and debt financing expenses for the six months ended June 30, 2024, were $28.9 million, up from$24.5 million in the same period of 2023, indicating a 17.9% increase[238] - The company recorded net unrealized gains of $9.9 million for the six months ended June 30, 2024, compared to$6.6 million for the same period in 2023, a 50.0% increase[240] IPO and Capital Structure - The company closed its initial public offering on May 24, 2024, issuing 6,000,000 shares at a public offering price of $16.63 per share, resulting in net cash proceeds of$93.8 million[214] - A regular dividend of $0.40 per share was paid on July 15, 2024, totaling$28.4 million, with $4.4 million reinvested into the company[216] - The company has an asset coverage ratio of 289$603 million of undrawn commitments available on its credit facilities as of June 30, 2024[249] - The company increased its revolving funding facility commitment from $455 million to$600 million on April 3, 2024[254] Debt and Financing - As of June 30, 2024, the company had $75 million in senior unsecured notes outstanding and$640 million borrowed under credit facilities, with cash and cash equivalents of $15.1 million[249] - Total contractual obligations related to outstanding indebtedness as of June 30, 2024, amount to$622 million[257] - The interest rate on the corporate credit facility is based on Term SOFR plus an applicable spread of 2.35% per annum[252] - The company does not have any off-balance sheet financings or liabilities other than contractual commitments and legal contingencies[258] Management and Administration - The base management fee is calculated at an annual rate of 1.00% following the IPO, with an incentive fee on income subject to a twelve-quarter lookback hurdle rate of 1.50%[271] - The Company will reimburse the Administrator for costs incurred under the Administration Agreement, which may include office facilities and compensation for officers[273] - The Administrator has engaged Ultimus Fund Solutions, LLC for fund administration and accounting services, with fees constituting reimbursable expenses[274] - The Administration Agreement has been extended through March 15, 2025, allowing for continued administrative support[272] Interest Rate Sensitivity - Interest rate sensitivity indicates that a 200 basis point decrease in interest rates could lead to a net decrease in investment income of $25.4 million[278] - A 100 basis point increase in interest rates could result in a net increase in investment income of$12.6 million[278] - The Company may hedge against interest rate fluctuations using standard hedging instruments, which could limit benefits from lower interest rates[279] - The Company does not include investments on non-accrual status in its interest rate sensitivity calculations[277] Incentive Fees and Waivers - The Advisor implemented waivers of the income incentive fee for three quarters and a portion of the base management fee for one year post-IPO[271] - The Advisor's income incentive fee may be reduced if the portfolio experiences aggregate write-downs or net capital losses during the trailing twelve quarters[271]