Investment Income - Total investment income for the three months ended March 31, 2022, was $11.9 million, a significant increase from $1.7 million in the same period of 2021[178]. - Net investment income for the three months ended March 31, 2022, was $6.2 million, compared to $0.6 million for the same period in 2021[177]. Portfolio Composition - The company had 104 debt investments and 4 equity investments in 50 portfolio companies with an aggregate fair value of approximately $617.1 million as of March 31, 2022[170]. - The portfolio's industry composition as of March 31, 2022, included 18.0% in commercial services & supplies and 14.3% in trading companies & distributors[174]. - The company anticipates that at least 90% of its portfolio will be invested in secured middle market loans, primarily in core middle market companies[165]. Investment Activity - New investments for the three months ended March 31, 2022, totaled $11.5 million, a decrease from $159.8 million in the same period of 2021[172]. - The principal amount of investments funded for private credit investments was $66.9 million for the three months ended March 31, 2022[172]. - As of March 31, 2022, the company had $81.8 million in unfunded commitments to provide debt financing to portfolio companies, indicating ongoing investment potential[193]. Financial Health - As of March 31, 2022, the asset coverage ratio was 260%, significantly above the required minimum of 150%, indicating strong financial health[183]. - The company expects cash and cash equivalents, along with undrawn capital commitments, to be sufficient for its investing activities over the next twelve months[184]. - The company plans to target an asset coverage ratio of 200% to 180%, equating to a debt-to-equity ratio of 1.0x to 1.25x, subject to market conditions[183]. Expenses and Fees - Total expenses for the three months ended March 31, 2022, were $5.7 million, compared to $1.1 million in the same period of 2021[179]. - The company will pay a base management fee to its Advisor based on the fair market value of investments, excluding cash and certain short-term instruments[202]. - The company has an Administration Agreement with its Advisor for necessary administrative services, with reimbursement for expenses incurred on behalf of the company[205]. Borrowings and Liquidity - As of March 31, 2022, the company had $242.0 million borrowed under credit facilities and cash and cash equivalents of $8.8 million, showing a decrease in liquidity compared to $296 million borrowed and $3.8 million in cash as of May 11, 2022[185]. - The Corporate Credit Facility has a total commitment of $275 million, with a potential increase to $550 million under certain circumstances, and an interest rate of Term SOFR plus 2.35% per annum[188]. - The Revolving Funding Facility has a total commitment of $250 million, with an interest rate of daily SOFR plus 2.35% per annum, maturing on February 18, 2027[190]. Unrealized Appreciation - For the three months ended March 31, 2022, the total unrealized appreciation was $1.1 million, down from $2.8 million in the same period of 2021, reflecting a decrease of approximately 60.7%[181][183]. Interest Rate Sensitivity - The company is subject to financial market risks, particularly interest rate sensitivity, which can affect net investment income due to borrowings[206]. - A hypothetical 25 basis points decrease in interest rates would result in a net investment income increase of $0.6 million, while a 300 basis points increase would yield an increase of $11.0 million[208]. - The company may use hedging instruments such as futures, options, and forward contracts to mitigate interest rate fluctuations, although this may limit benefits from lower interest rates[209].
Kayne Anderson BDC, Inc.(KBDC) - 2022 Q1 - Quarterly Report