Barings(US:BBDC)2020-04-30 20:18Investment Portfolio Performance - As of March 31, 2020, the weighted average yield on the syndicated senior secured loan portfolio was approximately 4.9%, while the middle-market senior secured private debt portfolio yielded about 6.4%[199]. - The overall weighted average yield on all outstanding investments, including equity and equity-linked investments, was approximately 5.3% as of March 31, 2020[199]. - The weighted average yield on the middle-market senior secured private debt portfolio was 7.9% as of March 31, 2020[199]. - The weighted average yield on investments decreased to 5.3% as of March 31, 2020, down from 6.1% as of March 31, 2019[227]. - The total value of the investment portfolio was $1,071.8 million as of March 31, 2020, down from $1,173.6 million as of December 31, 2019[217]. - The fair value of the total portfolio at the end of the period on March 31, 2020, was $1,071,753,340, down from $1,189,384,128 at the end of March 31, 2019, a decrease of 9.88%[226]. Impact of COVID-19 - The company experienced a significant reduction in net asset value as of March 31, 2020, primarily due to the COVID-19 pandemic, resulting in increased unrealized depreciation of the investment portfolio[207]. - The COVID-19 pandemic has adversely affected the operations of some portfolio companies, potentially leading to financial distress and defaults[205]. - The company may need to restructure investments in some portfolio companies due to the adverse effects of the COVID-19 pandemic, which could reduce interest payments received[206]. - The ongoing impact of COVID-19 on portfolio companies may materially affect future net investment income and the fair value of investments[262]. - The net unrealized depreciation on the company's current portfolio was driven by broad market moves totaling $82.6 million for liquid syndicated secured loans and structured products[235]. - The company continues to monitor the impacts of the COVID-19 pandemic on its financial condition and operations, with potential material adverse effects on future net investment income[212]. Financial Results - Total investment income for the three months ended March 31, 2020, was $18,679,598, compared to $18,339,758 for the same period in 2019, reflecting an increase of 1.85%[226]. - Net investment income decreased to $7,314,068 for the three months ended March 31, 2020, from $7,957,287 in the same period of 2019, a decline of 8.1%[226]. - Operating expenses increased to $11,365,530 for the three months ended March 31, 2020, from $10,382,471 in the same period of 2019, an increase of 9.5%[228]. - The company recorded net unrealized depreciation of $119,396,053 for the three months ended March 31, 2020, compared to net unrealized appreciation of $25,397,188 in the same period of 2019[235]. - Net realized losses totaled $302,372 for the three months ended March 31, 2020, compared to $129,775 for the same period in 2019[233]. Debt and Financing - Approximately $1,218.4 million of the company's debt portfolio investments bore interest at variable rates as of March 31, 2020, which are generally LIBOR-based[209]. - The company had borrowings of $48.2 million outstanding under the August 2018 Credit Facility as of March 31, 2020, with an interest rate of 1.812%[243]. - Under the February 2019 Credit Facility, the company had U.S. dollar borrowings of $225.0 million outstanding as of March 31, 2020, with a weighted average interest rate of 3.154%[246]. - The total fair value of borrowings under the February 2019 Credit Facility was $291.6 million as of March 31, 2020[247]. - The total commitments under the August 2018 Credit Facility were reduced from an initial $750.0 million to $150.0 million by January 21, 2020[242]. Investment Activity - During the three months ended March 31, 2020, the company purchased $27.9 million in syndicated senior secured loans and made new investments totaling $78.1 million in ten middle-market portfolio companies[219]. - The company made additional debt investments totaling $14.7 million in ten existing portfolio companies during the three months ended March 31, 2020[219]. - New investments made during the three months ended March 31, 2020, totaled $354,055,162, compared to $240,284,192 in the same period of 2019, an increase of 47.3%[226]. - The company completed a $449.3 million term debt securitization on May 9, 2019, through the issuance of various notes secured by a diversified portfolio of senior secured loans[248]. Shareholder Returns - The company intends to distribute at least 90% of its investment company taxable income (ICTI) to stockholders to maintain its RIC status[258]. - A quarterly distribution of $0.16 per share was declared on April 30, 2020, payable on June 17, 2020[263]. - The company is authorized to repurchase up to 5.0% of shares outstanding under the 2020 Share Repurchase Program if shares trade below NAV per share[254]. - During the three months ended March 31, 2020, Barings BDC repurchased a total of 661,981 shares at an average price of $7.23 per share[255]. Valuation and Compliance - The company is in compliance with asset coverage requirements under the 1940 Act as of March 31, 2020[209]. - The company utilizes an income approach model for valuing its private debt investment portfolio, which includes middle-market senior secured loans[280]. - The fair value of investments is determined using Level 3 inputs when quoted prices or other inputs from Level 1 and Level 2 are not available[270]. - The company has engaged an independent valuation firm to perform quarterly reviews of its middle-market investments[275]. - The company performs due diligence on independent pricing service providers to validate their methodologies and controls in the valuation process[279].