Kayne Anderson BDC, Inc. Q4 FY2024 earnings call

• Financial results: Net income per share was $0.50 in Q4 2024, down from $0.53 in Q3; net investment income per share was $0.48. Total investment income decreased due to lower reference rates and placing Sundance on non-accrual, partially offset by net portfolio additions.
• Investment activity: Fourth quarter 2024 saw $231 million in total commitments across 16 businesses, $175 million funded; $34 million of existing unfunded commitments were funded/partially funded. Repayments were $139 million. Broadly syndicated loan portfolio had no new fundings and $18 million in repayments. Net funded deployment was $52 million, increasing debt-to-equity ratio to 0.72x.
• Portfolio composition: As of Dec 31, 2024, portfolio had 110 companies, $2 billion fair value funded, $186 million unfunded. Yield was ~10.6%. Market conditions: Q4 2024 market activity robust, sponsor middle market volumes up; new transactions had spreads over SOFR of 500-600 bps.

During the fourth quarter, Kayne Anderson BDC, Inc. generated net investment income of $0.48 per share and net income of $0.50 per share. The portfolio included 110 individual portfolio companies with $2 billion of fair value funded investments, and another $186 million of unfunded commitments, totaling over $2.2 billion in commitments. The portfolio had a weighted average leverage of 4.2 times, interest coverage of 3.1 times, and LTV of approximately 42%, with 98% of the portfolio in first lien securities and 99% of private middle market investments backed by private equity sponsors. Non-accrual investments were 1.3% of total fair value.

• Target debt-to-equity ratio of 1-1.25x, aiming for low end in Q2/Q3 2025. First quarter 2025 origination strong, on track to be large. Plan to issue unsecured notes. Dividends: Q1 2025 regular dividend $0.40, two special dividends of $0.10 in March and June 2025, with undistributed net investment income to be distributed.

• Tariff and dose-related exposure risks to borrowers. Uncertainty from tariffs and government funding impacts on sectors like healthcare. Portfolio monitored for dose risk as changes occur in Washington.

Q: Expectation on achieving target leverage including rotating broadly syndicated loan portfolio?

A: Doug Goodwillie states it does not include rotating the broadly syndicated loan portfolio, assumes current investment pace.

Q: Tariff and dose exposure risks?

A: Assessed, minimal dose risk, some tariff uncertainty but portfolio well positioned.

Q: Leverage multiples and covenants?

A: Leverage consistent, sub-4x in 2024 and Q1 2025, spreads slightly lower in 2025 with consistent leverage and covenant terms.