Workflow
Kayne Anderson BDC, Inc.(KBDC) - 2024 Q4 - Earnings Call Transcript
KBDCKayne Anderson BDC, Inc.(KBDC)2025-03-04 16:23
Filings
Slide

Financial Data and Key Metrics Changes - In Q4 2024, the company reported net investment income of 0.48pershareandnetincomeof0.48 per share and net income of 0.50 per share, compared to 0.53pershareinthepreviousquarter[8][23]−Totalinvestmentincomedecreasedto0.53 per share in the previous quarter [8][23] - Total investment income decreased to 56.3 million from 57.8millioninthepriorquarter,primarilyduetoareductioninSOFRandtheimpactofplacingSundanceonnon−accrualstatus[23][24]−Totalexpensesincreasedto57.8 million in the prior quarter, primarily due to a reduction in SOFR and the impact of placing Sundance on non-accrual status [23][24] - Total expenses increased to 22.3 million from 20.8million,mainlyduetohigherinterestexpensesandexcisetax[25]BusinessLineDataandKeyMetricsChanges−Thecompanymade20.8 million, mainly due to higher interest expenses and excise tax [25] Business Line Data and Key Metrics Changes - The company made 231 million in total commitments across 16 businesses in Q4 2024, up from 153millioninQ42023[9]−FundingsinQ42024totaled153 million in Q4 2023 [9] - Fundings in Q4 2024 totaled 209 million, compared to 184millioninQ42023[10]−Thedebt−to−equityratioincreasedto0.72timesfrom0.66timesinthepreviousquarter[12][28]MarketDataandKeyMetricsChanges−Middlemarketsponsorloanvolumesincreasedby96184 million in Q4 2023 [10] - The debt-to-equity ratio increased to 0.72 times from 0.66 times in the previous quarter [12][28] Market Data and Key Metrics Changes - Middle market sponsor loan volumes increased by 96% in Q4 2024 compared to Q4 2023, and by 86% for the entire year [20] - The existing portfolio of private middle market investments has a weighted average spread over SOFR of approximately 609 basis points [21] Company Strategy and Development Direction - The company plans to continue winding down its broadly syndicated loan portfolio and focus on private middle market investments [11] - The first quarter of 2025 is expected to be one of the largest origination quarters since inception, indicating a strong growth trajectory [14][28] - The company aims to achieve the low end of its debt-to-equity target range of 1 to 1.25 times by mid-2025 [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of middle market private credit, even during economic downturns [18] - The company is optimistic about the stability of spreads and the availability of risk-adjusted lending opportunities [21][22] Other Important Information - The company declared a regular dividend of 0.40 per share for Q1 2025 and plans to distribute two special dividends of 0.10pershareinMarchandJune2025[32][33]−AsofDecember31,totalassetswere0.10 per share in March and June 2025 [32][33] - As of December 31, total assets were 2.08 billion, and net assets were 1.2billion,withanetassetvalueof1.2 billion, with a net asset value of 16.70 per share [27] Q&A Session Summary Question: Does the expectation to achieve target leverage include rotating the broadly syndicated loan portfolio? - Management clarified that the expectation does not include the rotation of the broadly syndicated loan portfolio and is based on current investment activity [36][37] Question: What is the assessment of risks related to borrowers and tariffs? - Management indicated that the portfolio has minimal exposure to government funding risks and assessed tariff risks, noting that most borrowers have the ability to flex pricing [38][39][42] Question: How have leverage multiples and covenants held up in the current market? - Management reported that leverage has remained consistent, with new investment activity around four times, and noted a slight decrease in closing fees [50][52][54]