Investment Portfolio - As of September 30, 2024, the company had investments in 110 portfolio companies with an aggregate fair value of approximately $1,943 million and unfunded commitments of $179 million[239]. - The average position size for private credit investments was $21.3 million as of September 30, 2024[242]. - The company had two debt investments on non-accrual status, representing 1.0% and 1.2% of total debt investments at fair value and cost, respectively[244]. - The company reported net investment commitments of $100.1 million for the three months ended September 30, 2024, compared to a net commitment of $(7.0) million for the same period in 2023[249]. - The company had called all capital related to $1,046.9 million in existing subscription agreements with investors through a private offering[273]. Financial Performance - Total investment income for the three months ended September 30, 2024, was $57.8 million, up from $41.2 million in the same period of 2023, representing a 40.0% increase[258]. - Net investment income for the nine months ended September 30, 2024, was $95.2 million, compared to $62.4 million for the same period in 2023, reflecting a 52.7% increase[258]. - Operating expenses for the three months ended September 30, 2024, totaled $27.5 million, compared to $19.8 million in 2023, indicating a 38.9% increase[260]. - The company reported total expenses of $72.9 million for the nine months ended September 30, 2024, compared to $55.9 million for the same period in 2023, a 30.5% increase[260]. Dividends and Shareholder Returns - A regular dividend of $0.40 per share was paid on October 15, 2024, totaling $28.4 million, with $4.5 million reinvested through open market purchases[235]. Debt and Leverage - As of September 30, 2024, 100% of the company's debt investments had floating interest rates[241]. - The weighted average leverage ratio for private middle market loans was 4.4x, and the weighted average interest coverage ratio was 2.9x[245]. - The asset coverage ratio as of September 30, 2024, was 251%, significantly above the required minimum of 150%[269]. - The company intends to target an asset coverage of 200% to 180%, equating to a debt-to-equity ratio of 1.0x to 1.25x[269]. - Total contractual obligations related to outstanding indebtedness at September 30, 2024, amounted to $788 million[279]. Interest Rate Sensitivity - The Company is subject to financial market risks, including changes in interest rates, which can materially affect net investment income[299]. - A hypothetical 200 basis points decrease in interest rates would result in a decrease of $23.9 million in net investment income[301]. - A hypothetical 100 basis points increase in interest rates would result in an increase of $12.0 million in net investment income[301]. - The Company may hedge against interest rate fluctuations using standard hedging instruments, which may limit participation in benefits of lower interest rates[302]. IPO and Capital Structure - The company completed its IPO 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 $92.4 million[233]. - The Corporate Credit Facility has a total commitment of $400 million, with a maturity date of February 18, 2027, and an interest rate of Term SOFR plus 2.35% per annum[274]. - The Revolving Funding Facility has a commitment of $600 million, with an interest rate reduced to SOFR plus 2.375% - 2.50% per annum[276]. - As of September 30, 2024, the company had $75 million in senior unsecured notes outstanding and $713 million borrowed under credit facilities, with cash and cash equivalents of $61.8 million[271]. Valuation and Fair Value - The Company has appointed an Advisor as the valuation designee for fair value determinations as permitted by Rule 2a-5 under the 1940 Act[287]. - The Audit Committee will meet quarterly to review the fair value determinations and processes of the Advisor[287]. - The base management fee under the Amended Investment Advisory Agreement is set at an annual rate of 1.00% following the IPO Date[293]. - The incentive fee on income is subject to a twelve-quarter lookback hurdle rate of 1.50%[293]. Unrealized Gains and Losses - Net unrealized gains on investments for the three months ended September 30, 2024, were $0.5 million, compared to a loss of $7.5 million in the same period of 2023[262]. - The largest contributor to unrealized gains for the three months ended September 30, 2024, was American Soccer Company, Incorporated (SCORE) with $1.6 million[263]. - For the nine months ended September 30, 2024, the total change in unrealized gains (losses), net was $1.4 million, with unrealized gains from other portfolio companies amounting to $10.4 million and unrealized losses totaling $(7.9) million[266].
Kayne Anderson BDC, Inc.(KBDC) - 2024 Q3 - Quarterly Report