Market Overview - The Federal Reserve has decided to cut interest rates by 25 basis points, leading to uncertainty in global markets regarding the implications of this decision [1][3] - Australian shares have reacted negatively, with ASX 200 futures indicating a potential loss of -0.12% at the market open [2] - Wall Street also experienced declines, with the S&P 500 and Nasdaq dropping, while the Dow Jones saw a modest gain of +0.57% [2] Company News - Santos (ASX:STO) is under scrutiny after Abu Dhabi National Oil Co withdrew its $36 billion takeover offer, citing factors that diminished the target's value during due diligence [4] - Macquarie Group (ASX:MQG) is in the news for having proposed a merger with Carlyle Group earlier this year, although discussions have since stalled [5] - ANZ Group (ASX:ANZ) continues to face challenges, recently parting ways with several senior executives following a fine [5] Commodity and Forex Update - The Australian dollar is trading at 66.5 U.S. cents [6] - Iron Ore prices have decreased by -0.3%, currently at $105.85 per tonne [6] - Brent Crude is priced at $67.95 per barrel, while gold has retreated to $3,667 [6]

Japanese beer maker Orion Breweries is planning its listing in Tokyo as early as next month, sources say, six years after Carlyle Group and Nomura bought the company https://t.co/bWm6c4iVvP ...

Market Trends & Insights - Carlyle Group CEO Harvey Schwartz discusses the potential for a bad credit cycle in the US [1] - Bloomberg Originals offers data-led shows investigating the intersection of business and culture, covering topics like climate change, technology, finance, and sports [1] Content & Platform - Bloomberg provides unlimited access to Bloombergcom for $199/month for the first 3 months [1] - Bloomberg Originals provides exclusive interviews, data-driven analysis, and the latest in tech innovation [1] - Bloomberg News offers global news and insights [1]

Carlyle Group hired a Goldman executive to lead its direct lending arm as the money manager works to grow its private credit business https://t.co/mwiOWzw9mA ...

Core Viewpoint - Baxter International has appointed Andrew Hider as the new President and CEO, effective no later than September 3, 2025, following the transition from interim CEO Brent Shafer to independent board chairman [1][2]. Group 1: About Andrew Hider - Hider has over 25 years of cross-industry experience in industrial automation and life sciences, with a leadership style focused on customer orientation, operational efficiency, and shareholder value while maintaining a commitment to quality and innovation [4][6]. - Under Hider's leadership at ATS Corporation, the company shifted its investment strategy towards high-growth markets, particularly in life sciences, resulting in nearly a doubling of adjusted revenue and a tripling of stock price over five years [6]. Group 2: Company Updates - Baxter has undergone significant strategic transformation, including the divestiture of its kidney care business for $3.8 billion to Carlyle Group, completing a divestiture plan announced in 2023 [5][7]. - The company also sold its biopharmaceutical solutions business for $4.25 billion to Warburg Pincus and Advent International in 2023, further focusing on its core medical technology business [7]. Group 3: Financial Performance - Baxter reported Q4 2024 sales of $2.75 billion, a 1% year-over-year increase, with adjusted earnings per share of $0.58. For 2025, the company expects sales growth of 5%-6% and adjusted earnings per share between $2.45 and $2.55 [13]. - In Q1 2025, Baxter achieved a 5% sales growth and adjusted earnings per share of $0.55, leading to an upward revision of the 2025 sales growth forecast to 7%-8% [13]. Group 4: Strategic Focus - Baxter aims to enhance healthcare efficiency through connected devices and digital data sharing, particularly in hospital, clinic, and home care settings. The company plans to increase R&D investment in high-growth areas such as advanced surgical technologies and infusion therapies while optimizing its supply chain to address global challenges [9].

Financial Data and Key Metrics Changes - Adjusted net investment income decreased to $39 million or $0.45 per share from $45 million or $0.54 per share in the previous quarter [5] - Net asset value declined to $16.75 per share from $17.63 in the prior quarter [5] - Investments on non-accrual status increased to 4.67% of fair market value and cost, compared to 3.95% in the first quarter [6] Business Line Data and Key Metrics Changes - The company committed $407 million of capital across 32 investments, compared to 13 investments totaling $198 million in the previous quarter [15] - The weighted average yield on new debt investments was 9.5%, slightly down from 9.6% in the prior quarter [16] - The median EBITDA of portfolio companies increased to approximately $158 million, up $16 million from the prior quarter [16] Market Data and Key Metrics Changes - The leverage in portfolio companies remained steady at 5.4 times, below overall middle market leverage levels [16] - The portfolio's weighted average interest coverage declined to 1.8 times from 2.1 times in the previous quarter [16] - The joint ventures generated an attractive annualized ROE of approximately 10.6% [24] Company Strategy and Development Direction - The company is focusing on larger, more diversified businesses that can withstand uncertain times [16] - There is a heightened focus on underwriting and risk evaluation due to potential impacts from tariffs and inflation [28] - The company is actively seeking opportunities in capital solutions or rescue financing during periods of market volatility [28] Management's Comments on Operating Environment and Future Outlook - The management noted significant uncertainty surrounding the trade environment and its potential impact on portfolio performance [27] - There is an expectation of cautious capital deployment among lenders due to the current economic outlook [28] - The company believes it is well-positioned to navigate the current market environment and deliver attractive risk-adjusted returns to shareholders [29] Other Important Information - The company successfully issued new unsecured bonds to refinance existing bonds and amended its senior secured revolving credit facility, reducing interest rates [8] - The company has ample liquidity of approximately $1.1 billion, including $98 million in cash and $1 billion in undrawn capacity on credit facilities [23] Q&A Session Summary Question: Did the company lean into any liquid markets, structured finance, or syndicated loans in April? - The company was somewhat active but remained cautious due to unresolved tariff situations [32] Question: How successfully has the company been focusing on larger and diversified businesses? - The company noted that while larger borrowers were initially seeking better pricing in the broadly syndicated loan market, there has been a return of larger borrowers to the direct lending market [34][38] Question: Should the company expect any slowing of repayment activity during this period of volatility? - The management anticipates that repayments will remain significant but acknowledges that volatility may lead to a slowdown in the future [52] Question: Is the current yield reflective of what the portfolio should generate going forward? - The management indicated that the current yield is a decent run rate, influenced by reference rate declines and new non-accruals [59] Question: What is the expected ROE for the joint ventures over time? - The management believes achieving an ROE in the 11% to 12% range is achievable, depending on the opportunity set [62]