Goldman Sachs BDC(US:GSBD)2022-08-05 14:26Financial Data and Key Metrics Changes - Net investment income per share was $0.49, with adjusted net investment income at $0.45 per share for the quarter [8] - Net asset value per share decreased to $15.53, a decline of approximately 1.7% from the previous quarter [9] - GAAP net investment income for Q2 was $49.6 million, compared to $50.2 million in the prior quarter [30] - The weighted average yield of the investment portfolio increased to 8.6% from 7.9% in the prior quarter [22] Business Line Data and Key Metrics Changes - The company originated $366 million in new investment commitments, with $197 million in new investments to six new portfolio companies and $169 million in follow-on investments to 12 existing companies [19] - Total investments in the portfolio were $3.6 billion, with 97.4% in senior secured loans [21] - Sales and repayment activity totaled $106 million, driven by full repayment from two portfolio companies [20] Market Data and Key Metrics Changes - The weighted average net debt-to-EBITDA ratio decreased to 6.0 times from 6.2 times in the prior quarter [23] - The weighted average interest coverage of the companies in the investment portfolio was 2.1 times, down from 2.5 times in the prior quarter [23] - As of quarter end, 42% of the company's total principal amount of debt outstanding was unsecured [27] Company Strategy and Development Direction - The company focuses on investing in non-cyclical businesses with strong pricing power to navigate economic slowdowns [11] - The integration of the BDC platform into the broader direct lending business has enhanced access to potential transactions [12] - The company aims to achieve at least $0.45 of quarterly adjusted net investment income per share without additional waivers in the second half of the year [17] Management's Comments on Operating Environment and Future Outlook - The management highlighted the challenges posed by market volatility and inflationary pressures but expressed confidence in the portfolio's resilience [10] - The company anticipates further volatility in the environment ahead but remains optimistic about investment opportunities [36] Other Important Information - The company announced the resignation of the CFO, effective August 10, and welcomed a new CFO [35] - An at-the-market equity offering program was launched with an aggregate offering price of up to $200 million [31] Q&A Session Summary Question: Can you touch on the cross-platform co-investing? - The company did not have any cross-allocated deals this quarter but had several cross-originated deals that were beneficial to the BDC platform [39] Question: What are the parameters looked at outside of risk-adjusted yield? - The focus is on middle-market companies with maintenance covenants and defensive industries that have protected cash flows [40] Question: Are there emerging challenges in the software sector? - The company has been selective in underwriting recurring revenue loans and has not seen issues in its portfolio despite market challenges [42] Question: What are the plans for the at-the-market offering program? - The company expects to raise between $10 million to $20 million in any given open trading window through the program [44]