Golub Capital(US:GBDC)2025-02-04 21:14Portfolio Performance - As of December 31, 2024, the total fair value of the company's portfolio was $8,685.2 million, an increase from $8,235.4 million as of September 30, 2024, representing a growth of approximately 5.5%[451] - The company's one stop loans accounted for 86.8% of total investments at fair value as of December 31, 2024, up from 86.3% as of September 30, 2024[451] - The company had debt and equity investments in 386 portfolio companies as of December 31, 2024, an increase from 381 companies as of September 30, 2024[453] - Recurring revenue loans within the one stop loans amounted to $1,104.2 million as of December 31, 2024, up from $1,021.3 million as of September 30, 2024[452] - Total investment income for the three months ended December 31, 2024, was $220.7 million, a decrease of $3.7 million from the previous quarter and an increase of $55.9 million compared to the same period last year[481] - Net investment income after taxes for the three months ended December 31, 2024, was $96.6 million, down from $119.6 million in the previous quarter and up from $83.5 million year-over-year[479] - Average earning debt investments at fair value increased to $7.73 billion as of December 31, 2024, up by $347.2 million from the previous quarter and $2.59 billion from the same period last year[481] - The portfolio median EBITDA for portfolio companies was $62.7 million as of December 31, 2024, slightly down from $63.7 million as of September 30, 2024[541] Revenue and Income - The weighted average income yield for the three months ended December 31, 2024, was 10.9%, a decrease from 11.7% in the previous quarter[457] - The total return based on average net asset value for the three months ended December 31, 2024, was 11.0%, compared to 9.4% in the previous quarter[457] - Interest income for the three months ended December 31, 2024, was $200.0 million, a decrease of $0.9 million from the previous quarter and an increase of $55.5 million year-over-year[481] - Adjusted Net Investment Income for the three months ended December 31, 2024, was $102.3 million, down from $125.8 million in the previous quarter and up from $85.2 million year-over-year[479] Expenses and Fees - The company expects general and administrative expenses to remain stable or decline as a percentage of total assets during periods of asset growth[459] - Total net expenses for the three months ended December 31, 2024, were $124.6 million, an increase of $19.8 million from the previous quarter and $43.9 million from the same period last year[486] - The base management fee increased due to a rise in average adjusted gross assets, largely attributed to the acquisition of GBDC 3 in June 2024[490][491] - The Income Incentive Fee increased by $5.0 million from Q3 2024 to Q4 2024, but decreased by $3.2 million compared to Q4 2023 due to a reduction in the incentive fee rate from 20% to 15% after the GBDC 3 acquisition[493] Debt and Financing - The outstanding debt under the JPM Credit Facility increased to $1,191.3 million as of December 31, 2024, from $956.6 million as of September 30, 2024, reflecting an increase of about 24.5%[509] - The company had $806.2 million of remaining commitments and availability on the JPM Credit Facility as of December 31, 2024, compared to $865.9 million as of September 30, 2024, indicating a decrease of approximately 6.9%[509] - The total outstanding debt under the 2024 Debt Securitization was $1,364.0 million as of December 31, 2024[518] - The company had outstanding debt under the GBDC 3 2022 Debt Securitization of $232.5 million as of December 31, 2024, down from $236.8 million as of September 30, 2024, a decrease of approximately 1.4%[516] - The company had outstanding debt under the GBDC 3 2021 Debt Securitization of $298.0 million as of September 30, 2024[515] Mergers and Acquisitions - The GBDC 3 Merger resulted in the issuance of 92,115,308 shares of common stock to former stockholders of GBDC 3[471] - The company completed acquisitions of GCIC and GBDC 3, which were accounted for under the asset acquisition method, impacting the financial results[476] - The GBDC 3 Merger Agreement replaced the previous Investment Advisory Agreement, effective upon the merger[472] - The company completed the acquisition of GBDC 3 on June 3, 2024, enhancing its market position and operational scale[554] Cash Flow and Liquidity - Cash used in operating activities for Q4 2024 was $374.7 million, driven by $450.2 million from principal payments and sales of portfolio investments, and cash provided by financing activities was $238.1 million[506] - The company experienced a net decrease in cash and cash equivalents of $136.6 million for Q4 2024, compared to a net increase of $32.8 million in Q4 2023[506][507] - As of December 31, 2024, the company had cash and cash equivalents of $103.5 million, down from $123.1 million as of September 30, 2024, representing a decrease of approximately 16.0%[508] Valuation and Risk Management - The valuation designee is responsible for determining the fair value of investments not publicly traded, with a multi-step valuation process conducted quarterly[562] - The primary method for determining enterprise value uses a multiple analysis applied to the portfolio company's EBITDA[569] - The company monitors the risk profile of its investments and assigns internal performance ratings, with a focus on increasing monitoring intensity for investments rated 1, 2, or 3[542] - The company’s investments are subject to market risk, which is directly impacted by volatility and liquidity in the markets[572] - The company utilizes standard hedging instruments such as interest rate swaps, futures, options, and forward contracts to mitigate interest rate fluctuations[588] Future Outlook - The company expects to fund the growth of its investment portfolio through net proceeds from future securities offerings and borrowings, but cannot assure success in raising capital[534] - The company intends to make quarterly distributions to stockholders, although future distributions may be limited by operating results and asset coverage requirements[549] - The company expects that future loans could also have floating interest rates, typically based on floating SOFR or another base rate[585]