Assessing Golub Capital BDC's Performance For Calendar Q2 2025

Core Viewpoint - Golub Capital BDC (NASDAQ:GBDC) had a quarter that met expectations, with a likely safe dividend for 2025 and trading at a slight discount to NAV, placing it in a "hold" range [1] Financial Performance - GBDC experienced a minor quarterly NAV decrease, aligning with expectations, and reported a combined net realized loss and unrealized depreciation of $11 million for Q2 2025, compared to a projected loss of $20 million [2] - The investment portfolio size increased by $340 million during Q2 2025, primarily due to $557 million in loan originations, resulting in a 4.0% quarterly increase [5] - Adjusted NII slightly outperformed expectations, with a minor quarterly increase compared to a projected decrease [4] Yield and Income - GBDC reported a weighted average annualized yield of 10.30% for Q2 2025, a slight decrease from 10.50% in Q1 2025, which matched expectations [6] - The company did not waive any income incentive fees during Q2 2025, contrasting with previous quarters where fees were waived [7] Debt Management - GBDC's recent debt refinancing and amendments are expected to improve NII/adjusted NII in future quarters, with a reduction in effective margin/spread [8] - The company repurchased 2.4 million shares at an average price of $13.99 during market volatility in April 2025, contributing to minor NAV accretion [3] Non-Accrual Status - No new portfolio companies were placed on non-accrual status during Q2 2025, maintaining the total at 9 companies, which accounted for 1.2% of the investment portfolio based on amortized cost [18][17] Dividend Outlook - GBDC declared an unchanged base dividend of $0.39 per share for Q3 2025, with no notable risk of a decrease in the current quarterly base dividend during 2025 [19][20] Valuation - GBDC is currently valued at a slight discount to its NAV, with a HOLD recommendation based on appropriate valuation [22]