Golub Capital(US:GBDC)2025-05-05 21:07Portfolio Overview - As of March 31, 2025, the total portfolio at fair value was $8,621.2 million, an increase from $8,235.4 million as of September 30, 2024[457]. - The company had debt and equity investments in 393 portfolio companies as of March 31, 2025, an increase from 381 companies as of September 30, 2024[459]. - As of March 31, 2025, the company had investments in 393 portfolio companies with a total fair value of $8.6 billion, up from $8.2 billion for 381 companies as of September 30, 2024[548]. - The portfolio median EBITDA for portfolio companies was $65.4 million as of March 31, 2025, compared to $63.7 million as of September 30, 2024[553]. Investment Performance - The weighted average annualized income yield for the three months ended March 31, 2025, was 10.5%, down from 10.9% for the previous quarter[460]. - The weighted average investment income yield for the six months ended March 31, 2025, was 11.0%, compared to 12.7% for the same period in the previous year[460]. - The total return based on average net asset value for the six months ended March 31, 2025, was 9.5%, compared to 13.2% for the same period in the previous year[460]. - Interest income for the three months ended March 31, 2025, decreased by $11.9 million to $188.15 million compared to $200.035 million for the three months ended December 31, 2024[481]. - Total investment income decreased by $6.8 million to $213.892 million for the three months ended March 31, 2025, compared to $220.7 million for the previous quarter[488]. - Investment income increased by $105.6 million to $434.592 million for the six months ended March 31, 2025, compared to $329 million for the same period in 2024[488]. Debt and Financing - The company amended its JPM Credit Facility on April 4, 2025, extending the maturity date to April 4, 2030, and allowing total commitments to increase to up to $3.0 billion[476]. - As of March 31, 2025, the company had outstanding debt under the JPM Credit Facility of $1,110.1 million, with remaining commitments and availability of $887.4 million[520]. - The company had outstanding debt under the 2024 Debt Securitization of $1,364.0 million as of March 31, 2025[524]. - Average debt outstanding increased by $64.4 million from $4.770 billion in Q4 2024 to $4.834 billion in Q1 2025, and by $1.667 billion from $3.147 billion in Q1 2024 to $4.814 billion in Q1 2025[494]. - The effective annualized average interest rate decreased from 6.2% in Q4 2024 to 5.9% in Q1 2025, while it increased from 5.6% in Q1 2024 to 6.0% in Q1 2025[495]. Income and Expenses - General and administrative expenses are expected to remain stable or decline as a percentage of total assets during periods of asset growth[464]. - Interest and other debt financing expenses decreased by $9.7 million from $76.998 million in Q4 2024 to $67.432 million in Q1 2025, primarily due to lower interest rates and refinancing benefits[494]. - The base management fee increased by $0.1 million from $21.581 million in Q4 2024 to $21.714 million in Q1 2025, driven by an increase in average adjusted gross assets[497]. - The Income Incentive Fee increased by $0.2 million from $18.058 million in Q4 2024 to $18.247 million in Q1 2025, but decreased by $0.4 million from $36.754 million in Q1 2024 to $36.305 million in Q1 2025 due to a reduction in fee rates[500]. - Professional fees, administrative service fees, and general administrative expenses increased by $0.1 million from Q4 2024 to Q1 2025, and by $2.9 million from Q1 2024 to Q1 2025[503]. Shareholder Distributions - A quarterly distribution of $0.39 per share was declared on May 2, 2025, payable on June 27, 2025[477]. - The company intends to make quarterly distributions to stockholders, but there are no assurances regarding the level or consistency of these distributions[559]. - The company has made and intends to continue making requisite distributions to stockholders to relieve it from U.S. federal income taxes[587]. Risk Management - The company is subject to financial market risks, including valuation risk and changes in interest rates[592]. - The fair value of investments is subject to fluctuation due to the lack of readily available market prices, which may result in significant differences if liquidated[593]. - The company may hedge against interest rate fluctuations using instruments such as interest rate swaps, futures, and options[597]. - The analysis of interest rate sensitivity does not account for changes in credit market conditions or the composition of the asset portfolio[595]. Acquisitions and Growth Strategy - The company completed the acquisition of GBDC 3 on June 3, 2024, resulting in the issuance of 92,115,308 shares of common stock to former stockholders of GBDC 3[474]. - The company completed acquisitions of GCIC and GBDC 3, impacting the fair value of assets and liabilities assumed, with purchase premiums recognized as unrealized depreciation[482]. - The company targets a GAAP debt-to-equity ratio between 0.85x to 1.25x, with a net GAAP debt-to-equity ratio of 1.16x as of March 31, 2025[542]. - The company plans to fund the growth of its investment portfolio through net proceeds from future securities offerings and borrowings, but cannot assure successful capital raising efforts[546]. Valuation and Fair Value - The fair value of the company's debt investments as a percentage of the outstanding principal value was 98.4%, up from 97.8% as of September 30, 2024[552]. - The fair value of investments can differ significantly from values that would have been used had a readily available market value existed[581]. - Approximately 50% of the valuations of debt and equity investments without readily available market quotations are subject to review by an independent valuation firm[578]. - The primary method for determining enterprise value uses a multiple analysis applied to the portfolio company's EBITDA[579]. Non-Accrual Loans - The company had loans in eight portfolio companies on non-accrual status, with non-accrual investments as a percentage of total investments at cost and fair value being 1.2% and 0.7%, respectively[551]. - The total fair value of non-accrual loans was $59.9 million as of March 31, 2025, down from $93.2 million as of September 30, 2024[586].