Bain Capital Specialty Finance(US:BCSF)2026-02-27 14:00Financial Data and Key Metrics Changes - Net investment income per share for Q4 was $0.46, representing an annualized yield of 10.6% on equity, covering the base dividend of $0.42 per share by 110% [5][6] - Q4 earnings per share were $0.43, with an annualized return on equity of 9.9%. For the full year 2025, net investment income per share was $1.88, or 11.1% return on equity [6][27] - Total investment income for Q4 was $68.2 million, up from $67.2 million in Q3, driven by high-quality investment income primarily from contractual cash income [25] Business Line Data and Key Metrics Changes - New investment fundings in Q4 totaled $167.9 million, with $68 million into 11 new companies and $99.6 million into 82 existing companies [19] - The investment portfolio at fair value was approximately $2.5 billion across 203 portfolio companies, with 64% in first lien debt [21][22] - The weighted average yield on the investment portfolio was 10.8% at cost and 10.9% at fair value, down from 11.1% and 11.2% respectively [22][23] Market Data and Key Metrics Changes - The weighted average spread on new first lien originations during Q4 was 535 basis points, compared to approximately 500 basis points for average sponsored middle market first lien loans [9][10] - Median net leverage across borrowers was stable at 4.7x, with median interest coverage at 2.0x [16][23] - Non-accruals remained low at 1.5% at amortized cost and 0.8% at fair value, stable quarter-over-quarter [17][24] Company Strategy and Development Direction - The company focuses on the core middle market, aiming for greater spread premiums while maintaining conservative capital structures [9][10] - The investment philosophy emphasizes rigorous fundamental due diligence and selective underwriting, particularly in technology and software sectors [12][13] - The company aims to leverage Bain Capital's expertise across various sectors to enhance investment opportunities [10][12] Management's Comments on Operating Environment and Future Outlook - Management noted a constructive economic backdrop for new investments, with increased deal activity in the second half of 2025 [7][8] - The company anticipates facing earnings headwinds from a lower rate environment but sees potential growth levers from joint ventures and increased M&A deal volumes [18] - Management expressed confidence in maintaining the regular dividend of $0.42 per share, supported by healthy levels of spillover income [18] Other Important Information - The company declared a special dividend of $0.15 per share and an additional $0.03 per share special Q4 dividend [28] - The net asset value per share was $17.23, down from $17.40, primarily due to one-time special dividends [27][28] - Liquidity at quarter-end was strong at $690 million, including $604 million of undrawn capacity on the revolver credit facility [30] Q&A Session Summary Question: Were there any questions from analysts? - There were no questions from analysts during the call, and the company thanked participants for their time [33]