Crescent Capital BDC, Inc. Q2 FY2025 earnings call

Second Quarter Results - Net investment income $0.46 per share vs $0.45 in Q1, excluding one-time items NII was $0.48 per share. - NAV per share down ~0.4% due to special dividends. ### Market and Positioning - Deal activity constrained in Q2 due to tariffs and regulation; policy volatility augmented PE exits. - Add-ons to existing portfolio companies were ~half of total investments by count in Q2. - Incumbency in origination: remained lead lender in strong credits after sponsor changes. - Underwriting benefits from pandemic, inflation, supply chain experience; execution benefits from management familiarity. ### Portfolio - Gross deployment $58M in Q2, 99% first lien; 3 new platform investments $22M, $36M incremental in existing portfolio. - Portfolio yield stable at 10.4%, weighted average interest coverage of portfolio companies improved to 2.1x. - Risk ratings: 86% of portfolio 1-2 rated, watch list (3-5) 14%, nonaccruals 2.4%. ### Dividend and Repurchase - Declared $0.42 per share regular dividend for Q3, $0.05 special dividend. - Board approved $20M stock repurchase program, balance with investment pipeline and leverage. ### Longer-Term Performance - Since public listing in 2020, CCAP's NAV per share increased vs public BDC average, total economic return 49% vs public BDC average.

In the second quarter, net investment income was $0.46 per share (excluding $0.02 per share of one-time accelerated amortization, net investment income was $0.48 per share). NAV per share was down approximately 0.4% for the quarter, driven by special dividends. The investment portfolio was over $1.6 billion at fair value, with 187 companies, 91% first lien loans, focused on core and lower middle market, 99% sponsor-backed, weighted average loan-to-value at underwrite ~39%.

Dividend - Regular dividend of $0.42 per share for Q3, $0.05 special dividend payable in September. ### Stock Repurchase - Board approved $20M stock repurchase program, to be balanced with investment pipeline and leverage.

Policy Volatility - Deal activity constrained due to tariffs and regulatory uncertainty. ### Credit Quality - Watch list investments ticked up, lower-rated (4-5) investments also ticked up; nonaccrual rate a concern. ### Tariff Uncertainty - Impact on portfolio companies' ability to manage exposure, though direct tariff impact in portfolio is small.

Q: Comment on credit quality with watch list and lower-rated investments.

A: Henry noted preemptive approach to watch list, Jason mentioned nonaccrual rate not representative of underwriting process.

Q: Thoughts on portfolio companies' ability to manage tariff exposure?

A: Jason said direct tariff impact in portfolio is small, companies addressing via price and supply chain.

Q: Thoughts on modifying portfolio mix while at target leverage?

A: Henry said focused on industry focus and diversification, heavy on rotating acquired assets.

Q: Evaluate opportunity to increase unitranche investments?

A: Jason said unitranche segment small, opportunistic but not frequent.

Q: Energy prices impact on portfolio companies?

A: Henry said fuel costs not major cost component, human capital is larger.

Q: Second lien loans going down?

A: Henry said second lien not large component, spread premium tightened, will be selective if changes.