Goldman Sachs BDC(GSBD) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company's net investment income per share for Q1 2025 was $0.42, with a net asset value (NAV) per share of $13.2, reflecting a decrease of 1.6% from the previous quarter's NAV due to a special dividend of $0.16 per share and net realized and unrealized losses [8][9] - The adjusted NAV per share for Q1 2025, accounting for the special dividend, was $13.15, a non-GAAP measure introduced due to the dividend policy change [9] - The net debt to equity ratio at the end of Q1 2025 was 1.16 times, slightly down from 1.17 times at the end of Q4 2024, remaining below the targeted leverage ratio of 1.25 times [9][18] Business Line Data and Key Metrics Changes - New investment commitments during the quarter totaled approximately $87.8 million across 14 portfolio companies, with 100% of originations in first lien loans [11] - Sales and repayment activity amounted to $179.3 million, primarily driven by the full repayment and refinancing of six portfolio companies [13] - The weighted average yield of debt and income-producing investments at amortized cost decreased to 10.8% from 11.2% in the previous quarter [14] Market Data and Key Metrics Changes - The portfolio consists of 163 companies across 38 different industries, with 96.1% of total investments in senior secured loans [13][14] - The current weighted average interest coverage of the companies in the investment portfolio increased to 1.9 times from 1.8 times in the previous quarter [15] Company Strategy and Development Direction - The company is focused on maintaining exposure to the top of the capital stack, with a strategy that thrives in market volatility through unique opportunities within the Goldman Sachs ecosystem [11] - The company aims to deliver on a refreshed dividend structure while navigating a challenging macroeconomic environment [20] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic conditions, including tariffs, have impacted deal flow, but the majority of the portfolio companies are asset-light with minimal exposure to international supply chains [5][6] - The company remains optimistic about the resilience of its portfolio and the potential for a resurgence in M&A activity despite current market challenges [20] Other Important Information - The board declared a supplemental dividend of $0.05 per share payable on or about June 13, 2025, to shareholders of record as of May 30, 2025 [9] - The company has approximately $720 million of borrowing capacity remaining under its revolving credit facility [18] Q&A Session Summary Question: Portfolio yield decline and stabilization - Management indicated that the decline in portfolio yield was largely due to the exit of non-accrual positions with high coupons, and they do not expect significant repricing activity moving forward [22][26] Question: Impact of tariff exposure on fair value - Management clarified that the identified companies with tariff exposure have not yet shown performance deterioration that would affect their fair value, but they are monitoring the situation closely [27][28]