Barings(US:BBDC)2025-08-07 20:21Investment Portfolio - As of June 30, 2025, the total value of the investment portfolio was $2,623.9 million, an increase from $2,449.3 million as of December 31, 2024[417]. - The company had investments in 332 portfolio companies with an aggregate cost of $2,635.8 million as of June 30, 2025, compared to 328 portfolio companies with an aggregate cost of $2,522.7 million as of December 31, 2024[417]. - As of June 30, 2025, the total fair value of the investment portfolio was $2,623.9 million, with senior debt and first lien notes comprising 71% of the portfolio[418]. - The total cost of the investment portfolio as of June 30, 2025, was $2,635.8 million, with senior debt and first lien notes valued at $1,875.4 million[418]. - The company made new commitments of approximately $59.3 million, with $38.6 million closed and funded, including $28.9 million in first lien senior secured debt investments[501]. - As of June 30, 2025, the investment portfolio was valued at approximately 223% of total net assets, up from 206% as of December 31, 2024[505]. Investment Performance - The weighted average yield on the principal amount of outstanding debt investments, excluding non-accrual debt investments, was approximately 9.8% as of June 30, 2025, down from 10.2% as of December 31, 2024[411]. - The weighted average yield of the debt investments was 9.4%[501]. - Total investment income for the three months ended June 30, 2025, was $74.398 million, a slight decrease from $74.886 million for the same period in 2024[436]. - Net investment income after taxes for the three months ended June 30, 2025, was $29.810 million, down from $42.142 million in the same period of 2024[436]. - Total operating expenses for the three months ended June 30, 2025, increased to $43.780 million from $32.429 million in the same period of 2024[440]. - Dividends from portfolio companies for the three months ended June 30, 2025, were $14.593 million, up from $11.734 million in the same period of 2024[438]. Debt and Financing - Senior secured, middle-market, first lien private debt investments generally bear interest between SOFR plus 450 basis points and SOFR plus 650 basis points per annum[410]. - Subordinated middle-market, private debt investments generally bear interest between SOFR plus 700 basis points and SOFR plus 900 basis points per annum if floating rate, and between 8% and 15% if fixed rate[410]. - As of June 30, 2025, the company had U.S. dollar borrowings of $342.5 million outstanding under the February 2019 Credit Facility, with a weighted average interest rate of 6.286%[461]. - The fair value of the borrowings outstanding under the February 2019 Credit Facility was $547.3 million as of June 30, 2025[462]. - The company entered into a Note Purchase Agreement for the February Notes, totaling $150.0 million, with fixed interest rates of 3.41% and 4.06%[474]. - The company has U.S. dollar borrowings of $342.5 million at an interest rate of 6.286%, with additional borrowings in British pounds and Euros[544]. Cash Flow and Liquidity - As of June 30, 2025, the company had $49.3 million in cash and foreign currencies on hand, including $4.7 million of restricted cash[456]. - The company experienced a net decrease in cash of $42.1 million for the six months ended June 30, 2025, with operating activities using $60.5 million in cash[456]. - Financing activities provided net cash of $18.4 million, consisting of net borrowings of $86.0 million under the February 2019 Credit Facility[456]. - For the six months ended June 30, 2024, the company experienced a net increase in cash of $13.8 million, with operating activities providing $143.2 million in cash[457]. Investment Losses and Gains - The company recognized a net realized loss of $27.9 million from 24 loan repayments totaling $125.2 million during the first half of 2025[419]. - Net realized losses totaled $15.2 million for the three months ended June 30, 2025, primarily due to a $14.3 million loss on forward currency contracts and an $11.1 million loss on the investment portfolio[447]. - During the six months ended June 30, 2025, net realized losses amounted to $16.2 million, with a predominant loss of $28.8 million on the investment portfolio[447]. - The company reported a net realized gain of $2.5 million from the exit of a royalty rights investment during the first half of 2025[419]. Risk Management - The company employs risk management systems to monitor interest rate risk and may use hedging instruments like interest rate swaps to mitigate exposure[539]. - The company’s net investment income is sensitive to fluctuations in various interest rates, including SOFR and EURIBOR[539]. - Interest rate risk management includes regular measurement of exposure and potential hedging transactions to protect against adverse fluctuations[539]. - The company may experience exposure to foreign currency fluctuations related to certain investments, which are financed through local currency borrowings[544]. Shareholder Returns - The company intends to pay quarterly distributions to stockholders and has adopted a dividend reinvestment plan (DRIP)[496]. - A quarterly distribution of $0.26 per share was declared, payable on September 10, 2025[502]. - The company has authorized a new 12-month share repurchase program allowing for up to $30.0 million in repurchases[495]. - During the six months ended June 30, 2025, the company repurchased a total of 250,000 shares of common stock at an average price of $9.35 per share[495]. Valuation and Fair Value - The fair value of investments is determined using Level 3 inputs when market quotations are not readily available[508]. - The company utilizes independent valuation providers for loans and equity investments without readily determinable fair values[515]. - Loan origination fees are recorded as deferred income and recognized over the term of the loan, impacting reported investment income[523].