Goldman Sachs BDC, Inc.

Transcription

1 Goldman Sachs BDC, Inc. Investor Presentation

2 Disclaimer and Forward-Looking Statement The information contained in this presentation should be viewed in conjunction with the earnings conference call of Goldman Sachs BDC, Inc. ( GS BDC or the Company ) (NYSE: GSBD) held on August 4, 207 and the Company s Quarterly Report on Form 0-Q for the quarter ended June 30, 207. The information contained herein may not be used, reproduced or distributed to others, in whole or in part, for any other purpose without the prior written consent of the Company. This investor presentation may contain forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by the use of forward-looking terminology such as may, will, should, expect, anticipate, project, target, estimate, intend, continue, or believe or the negatives thereof or other variations thereon or comparable terminology. You should read statements that contain these words carefully because they discuss our plans, strategies, prospects and expectations concerning our business, operating results, financial condition and other similar matters. These statements represent the Company s belief regarding certain future events that, by their nature, are uncertain and outside of the Company s control. We believe that it is important to communicate our future expectations regarding these events to our investors. There are likely to be events in the future that we are not able to predict accurately or control. Any forward-looking statement made by us in this presentation speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ, possibly materially from our expectations, include, but are not limited to, the risks, uncertainties and other factors we identify in the sections entitled Risk Factors and Cautionary Statement Regarding Forward-Looking Statements in filings we make with the Securities and Exchange Commission, and it is not possible for us to predict or identify all of them. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. This presentation does not constitute a prospectus and should under no circumstances be understood as an offer to sell or the solicitation of an offer to buy our common stock or any other securities nor will there be any sale of the common stock or any other securities referred to in this presentation in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction. Nothing in these materials should be construed as a recommendation to invest in any securities that may be issued by GS BDC or as legal, accounting or tax advice. An investment in securities of the type described herein presents certain risks. GS BDC is managed by Goldman Sachs Asset Management, L.P. ( GSAM ), a wholly owned subsidiary of The Goldman Sachs Group, Inc. ( Group, Inc. ). Nothing contained herein shall be relied upon as a promise or representation whether as to the past or future performance. The information contained in this presentation is summary information that is intended to be considered in the context of other public announcements that we may make, by press release or otherwise, from time to time. We undertake no duty or obligation to publicly update or revise the information contained in this presentation. These materials contain information about GS BDC, certain of its personnel and affiliates and its historical performance. You should not view information related to the past performance of GS BDC as indicative of GS BDC s future results, the achievement of which cannot be assured. Further, an investment in GS BDC is discrete from, and does not represent an interest in, any other Goldman Sachs entity. 2

3 Quarterly Highlights Net investment income for the quarter ended June 30, 207 was $0.64 per share, as compared to $0.49 per share for the quarter ended March 3, 207; The Company announced a third quarter dividend of $0.45 per share payable to shareholders of record as of September 29, 207, equating to an annualized dividend yield of 9.9% on quarter end net asset value per share; Net asset value per share for the quarter ended June 30, 207 was stable at $8.23, as compared to $8.26 for the quarter ended March 3, 207; New investment commitments and fundings were $24.0 million and $20.3 million, respectively, while sales and repayments totaled $60.4 million; the yield on new investment commitments was 0.%, while the yield on investments repaid was 9.%; 2,3 The Senior Credit Fund ( SCF ) produced a 4.2% return on investment to the Company; The Company s investment in the SCF grew by approximately 4% during the quarter and continues to represent the Company s largest investment at 8.5% of total investments at fair value; 2,3,4 Investments on non-accrual represented 0.2% and 0.7% of the total investments at fair value and amortized cost, respectively; 2 In May, the Company completed an offering of 3,737,500 shares of common stock at a public offering price of $22.50 per share. Total net proceeds were $80.3 million. The $0.45 per share dividend is payable on October 6, 207 to holders of record as of September 29, The discussion of the investment portfolio of both the Company and the SCF excludes the investment in a money market fund managed by an affiliate of The Goldman Sachs Group, Inc. 3 Computed based on the (a) annual stated interest rate or yield earned plus amortization of fees and discounts on the performing debt and other income producing investments, divided by (b) the total performing debt and other income producing investments (excluding investments on non-accrual) at amortized cost. The yield on the SCF has been computed based on the net investment income earned from the SCF for the trailing twelve months ended June 30, 207, which may include dividend income and loan origination and structuring fees, divided by GS BDC s average member s equity at cost and fair value, adjusted for equity contributions. 4 The SCF s return to the Company was measured at amortized cost over the trailing four quarters. 3

4 Selected Financial Highlights (in $ millions, except per share data) Q2 206 Q3 206 Q4 206 Q 207 Q2 207 Investment portfolio, at fair value $,5. $,43.0 $,67.3 $,64.0 $,.8 Total debt oustanding Net assets Ending debt to equity x 0.70x 0.76x 0.76x 0.56x Average debt to equity x 0.74x 0.7x 0.70x 0.70x Total investment income $29.3 $34.0 $30.5 $32.2 $36.0 Net investment income after taxes Net increase in net assets resulting from operations Per Share Data: Net asset value per share $8.4 $8.58 $8.3 $8.26 $8.23 Net investment income per share (basic and diluted) Earnings per share (basic and diluted) Distribution per share The discussion of the investment portfolio excludes the Company s investment in a money market fund managed by an affiliate of Group, Inc. 2 Total debt outstanding excluding netting of debt issuance costs. Please refer to slide for debt net of issuance costs. 3 The average debt to equity leverage ratio has been calculated using the average daily borrowings during the quarter divided by average net assets, adjusted for equity contributions. The ending and average debt to equity leverage ratio excludes unfunded commitments. 4

5 Investment Activity New investment commitments and fundings were $24.0 million and $20.3 million, respectively, which includes net fundings of $2. million of previously unfunded commitments; and Sales and repayments totaled $60.4 million, bringing net funded portfolio change to $(40.) million. (in $ millions) Q2 206 Q3 206 Q4 206 Q 207 Q2 207 Investments in Goldman Sachs BDC, Inc. Gross Originations $4.6 $38.3 $0.3 $2.6 $24.0 New Investment Commitments Funded Unfunded Net Fundings of Previously Unfunded Commitments Sales and Repayments (4.) (08.6) (55.9) (0.3) (60.4) Net Funded Investment Activity $39.2 $20.0 $34.4 $(2.8) $(40.) Investments in Senior Credit Fund, LLC (SCF) 2 New Investment Commitments $57.9 $86.3 $05.6 $75.6 $65.0 Funded Unfunded Net Fundings of Previously Unfunded Commitments Sales and Repayments (47.0) (47.3) (5.7) (3.8) (79.4) Net Funded Investment Activity $0.9 $35.7 $86.7 $4.7 $(8.4) Investment activity includes any discretionary refinancings of existing investments. Commitments are generally subject to borrowers meeting certain criteria such as compliance with covenants and certain operational metrics. These amounts may remain outstanding until the commitment period of an applicable loan expires, which may be shorter than the loan s maturity date. 2 The SCF is an unconsolidated Delaware limited liability company. Investments in the SCF are funded with pro rata capital contributions by GS BDC and its joint venture partner and borrowings under the SCF s credit facilities. 5

6 Portfolio Asset Composition New Investment Commitments (at cost, $mm) End of Period Investments (at fair value, $mm) $38 4% 6% 29% 4% $90 9% 3% % $3 2% % $24 3% % 39% $,5 $,43 $,67 $,64 6% 6% 7% <% 8% 2% 3% <% % <% % 26% 25% 29% 28% <% <% $,2 9% % 29% % <% 59% 4% 27% 28% 27% 27% 28% $42 2% 7% 70% 2% 56% 86% 0% 8% 43% 39% 38% 36% 35% 33% Q2'6 Q3'6 Q4'6 Q'7 Q2'7 6/30/206 9/30/206 2/3/206 3/3/207 6/30/207 st Lien st Lien, Last-Out Unitranche 2nd Lien Unsecured Debt Preferred Stock Common Stock Investment Funds & Vehicles Q2'6 Q3'6 Q4'6 Q'7 Q2'7 6/30/206 9/30/206 2/3/206 3/3/207 6/30/207 st Lien st Lien, Last-Out Unitranche 2nd Lien Unsecured Debt Preferred Stock Common Stock Investment Funds & Vehicles Investment Funds & Vehicles represents the investment in the SCF. Figures may not sum due to rounding. The discussion of the investment portfolio excludes the investment in a money market fund managed by an affiliate of Group, Inc. 6

7 Credit Quality of Investments Non-Accrual Investments As of June 30, 207, investments on non-accrual represented 0.2% and 0.7% of the total investment portfolio at fair value and amortized cost, respectively. Internal Investment Risk Rating (in $ millions) Q4 206 Q 207 Q2 207 Rating Fair Value % of Total Portfolio at FV Fair Value % of Total Portfolio at FV Fair Value % of Total Portfolio at FV $ % $ % $ % 2 $ % $ % $ % 3 $ % $ % $ % 4 $6.8.4% $3.9.2% $ % Total $, % $, % $, % Internal Investment Risk Rating Definitions Rating Definition Involves the least amount of risk to our initial cost basis The trends and risk factors are generally favorable, which may include the performance of the portfolio company or a potential exit Involves a level of risk that is similar to the risk to our initial cost basis at the time of origination or acquisition Borrower is generally performing as expected and the risk factors are neutral to favorable Indicates that the investment s risk has increased materially since origination or acquisition Borrower may be out of compliance with debt covenants; however, payments are generally not more than 20 days past due Indicates that the investment s risk has increased substantially since origination or acquisition Most or all of the debt covenants are out of compliance and payments are substantially delinquent; investments are not anticipated to be repaid in full and we may realize a substantial loss of our initial cost basis upon exit The discussion of the investment portfolio excludes an investment in a money market fund managed by an affiliate of Group, Inc. 7

8 Portfolio Summary Goldman Sachs BDC, Inc. Portfolio Characteristics (as of June 30, 207) Invested Portfolio Total investments and commitments ($mm) $,26.2 Unfunded commitments ($mm) $4.4 Investments at fair value ($mm) $,.8 Yield at fair value of investments (%) 2.5% Yield at amortized cost of investments (%) 0.8% Portfolio Companies Total Investments 2 Number of portfolio companies 45 Weighted average leverage (net debt/ebitda) 5.0x Weighted average interest coverage 2.6x Median EBITDA ($mm) $26.6 Preferred Stock,.0% Unsecured Debt, 0.3% Common Stock,.4% 2nd Lien, 28.5% Seniority 3 st Lien, 32.7% st Lien, Last- Out Unitranche, 27.6% Investment Funds & Vehicles, 8.5% Fixed/Floating 3,4 Industry Diversification 3 Fixed, 4.% Floating, 95.9% Industry % of Portfolio Software 9.9% Diversified Telecommunication Services 8.6% Investment Funds & Vehicles 8.5% Air Freight & Logistics 6.2% Health Care Equipment & Supplies 6.% Other ( 5.9% each) 60.7% The discussion of the investment portfolio excludes an investment in a money market fund managed by an affiliate of Group, Inc. Computed based on the (a) annual stated interest rate or yield earned plus amortization of fees and discounts on the performing debt and other income producing investments, divided by (b) the total investments (including investments on non-accrual and non-incoming producing investments) at amortized cost or fair value, respectively. 2 For a particular portfolio company, EBITDA typically represents net income before net interest expense, income tax expense, depreciation and amortization. The net debt to EBITDA represents the ratio of a portfolio company s total debt (net of cash) and excluding debt subordinated to the Company s investment in a portfolio company, to a portfolio company s EBITDA. The interest coverage ratio represents the ratio of a portfolio company s EBITDA as a multiple of a portfolio company s interest expense. Weighted average net debt to EBITDA is weighted based on the fair value of the Company s debt investments, including the Company s exposure to underlying debt investments in the SCF and excluding investments where net debt to EBITDA may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue. Weighted average interest coverage is weighted based on the fair value of the Company s performing debt investments, including the Company s exposure to underlying debt investments in the SCF and excluding investments where EBITDA may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue. Median EBITDA is based on the Company s debt investments, including the Company s exposure to underlying debt investments in the SCF and excluding investments where EBITDA may not be the appropriate measure of credit risk, such as cash collateralized loans and investments that are underwritten and covenanted based on recurring revenue. As of June 30, 207, investments where EBITDA may not be the appropriate measure of credit risk represented 6.7% of total debt investments, including the Company s investment in the SCF, at fair value. Portfolio company statistics are derived from the most recently available financial statements of each portfolio company as of the respective reported end date. Portfolio company statistics have not been independently verified by us and may reflect a normalized or adjusted amount. 3 Measured on a fair value basis. 4 The fixed versus floating composition has been calculated as a percentage of performing debt investments, including income producing preferred stock investments. 8

9 Portfolio Summary Senior Credit Fund, LLC GS BDC Return on SCF Investment at Fair Value 4.0% GS BDC Return on SCF Investment at Amortized Cost 4.2% Portfolio Characteristics (as of June 30, 207) Invested Portfolio Total investments and commitments ($mm) $54.9 Unfunded commitments ($mm) $2.5 Investments at fair value ($mm) $502.4 Yield at fair value of investments (%) 7.2% Yield at amortized cost of investments (%) 7.2% Investments on non-accrual (%) -% Portfolio Companies Total Investments 2 Number of portfolio companies 35 Weighted average leverage (net debt/ebitda) 4.x Weighted average interest coverage 3.x Median EBITDA ($mm) $44.0 Seniority 3 Fixed/Floating 3 Industry Diversification 3 st Lien, First-Out Unitranche,.9% 2nd Lien, 2.7% Industry % of Portfolio IT Services 0.4% Software 8.4% st Lien, 95.4% Floating 00% Internet Software & Services 7.2% Capital Markets 7.0% Commercial Services & Supplies 7.0% Other ( 6.4% each) 60.0% The discussion of the investment portfolio excludes the investment in a money market fund managed by an affiliate of Group, Inc. The Company also holds debt in one portfolio company whose debt is held by the SCF. Computed based on the net investment income earned from the SCF for the trailing twelve months ended June 30, 207, which may include dividend income and loan origination and structuring fees, divided by GS BDC s average member s equity at cost and fair value, adjusted for equity contributions. 2 For a particular portfolio company of the SCF, EBITDA typically represents net income before net interest expense, income tax expense, depreciation and amortization. The net debt to EBITDA represents the ratio of a portfolio company s total debt (net of cash) and excluding debt subordinated to the SCF s investment in a portfolio company, to a portfolio company s EBITDA. The interest coverage ratio represents the ratio of a portfolio company s EBITDA as a multiple of interest expense. Weighted average net debt to EBITDA is weighted based on the fair value of the SCF s debt investments. Weighted average interest coverage is weighted based on the fair value of the SCF s performing debt investments. Median EBITDA is based on the SCF s debt investments. Portfolio company statistics are derived from the most recently available financial statements of each portfolio company of the SCF as of the respective reported end date. Statistics of the SCF s portfolio companies have not been independently verified by us and may reflect a normalized or adjusted amount. 3 Measured on a fair value basis. 9

10 Quarterly Operating Results Q2 206 Q3 206 Q4 206 Q 207 Q2 207 Investment income Interest $26,489 $29,646 $26,83 $29,78 $32,495 Dividend income 2,9 2,468 2,56 2,473 2,470 Other income 64,836,506 54,052 Total investment income $29,32 $33,950 $30,493 $32,92 $36,07 Expenses Interest and credit facility expense $3,246 $3,628 $4,390 $4,52 $4,839 Management fees 4,88 4,292 4,406 4,46 4,35 Incentive fees 2,085 5,459,474 3,733,238 Other operating expenses,383,600,774,66,28 Total expenses before taxes $0,902 $4,979 $2,044 $3,872 $,556 Excise tax expense Net investment income after taxes $8,98 $8,677 $8,40 $7,955 $24,093 Net realized and unrealized gains (losses) on investment transactions Net realized gain (loss) on investments - $(2,993) $() $(68) $(38,08) Net change in unrealized appreciation (depreciation) on investments (,98) 25,979 (2,55) (3,222) 8,600 Net realized and unrealized gains (losses) $(,98) $3,986 $(2,552) $(3,390) $(9,508) Net increase in net assets resulting from operations $7,000 $22,663 $5,588 $4,565 $4,585 Per share data Net investment income $0.50 $0.5 $0.50 $0.49 $0.64 Earnings per share $0.9 $0.62 $0.5 $0.40 $0.2 Distribution per share $0.45 $0.45 $0.45 $0.45 $0.45 Weighted average shares outstanding 36,3,582 36,320,04 36,329,873 36,340,808 37,902,08 Shares outstanding, end of period 36,32,437 36,32,374 36,33,662 36,342,786 40,09,488 All figures in thousands ($000), except shares and per share data. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income. 0

11 Quarterly Balance Sheet Q2 206 Q3 206 Q4 206 Q 207 Q2 207 Assets Investments at fair value $,5,44 $,42,968 $,67,290 $,64,042 $,,846 Investments in affiliated money market fund 5, ,23 Cash 5,454 4,670 4,565 8,934 37,493 Receivable from investments sold Interest and dividends receivable 0,098,233 9,766 7,365 9,29 Other income receivable 544,68 2,22 2, Deferred financing and offering costs 5,7 4,866 6,623 6,452 5,48 Other assets ,34 78 Total Assets $,62,63 $,75,546 $,90,533 $,94,586 $,67,023 Liabilities & Net Assets Debt (net of issuance costs) $468,550 $47,250 $498,52 $50,67 $408,085 Interest and credit facility expense payable ,569 2,832 2,067 Management fees payable 4,88 4,292 4,406 4,46 4,35 Incentive fees payable 2,085 5,683,474 3,733,238 Payable for investments purchased Distribution payable 6,34 6,345 6,349 6,354 8,04 Other costs and liabilities 2,596 2,720 3,446,908 2,543 Total Liabilities $494,3 $500,576 $525,396 $530,986 $436,325 Total Net Assets $668,482 $674,970 $665,37 $663,600 $730,698 Total Liabilities and Net Assets $,62,63 $,75,546 $,90,533 $,94,586 $,67,023 Net Asset Value per share $8.4 $8.58 $8.3 $8.26 $8.23 All figures in thousands ($000), except per share data. The Company had debt issuance costs of $4,65 for the quarter ended June 30, 207. Please see the Company s Quarterly Report on Form 0-Q and Annual Report on Form 0-K for prior period information..

12 Net Asset Value Bridge $ (0.45) (0.52) $8.23 3/3/7 Ending Book NAV Accretion from Offering Q2' 7 Net Investment Income Q2' 7 Distribution Net Change in Realized 6/30/7 Ending Book NAV and Unrealized Appreciation (Depreciation) March 3, 207 NAV is based on March 3, 207 shares outstanding as of such date. June 30, 207 NAV is based on ending shares outstanding as of such date. Q2 7 per share data is based on weighted average shares outstanding for the quarter ended June 30,

13 Debt Commitment Amount ($mm) Debt Outstanding ($mm) Interest Rate Maturity Date Goldman Sachs BDC, Inc. Revolving Credit Facility $605 $297 LIBOR bps / 75 bps 2/6/202 Convertible Notes $5 $5 4.50% 04/0/2022 Total $720 $42 Senior Credit Fund, LLC Revolving Credit Facility $20 $59 LIBOR bps 2/9/2025 Term Loan Facility A $240 $240 LIBOR bps 2/9/2025 Term Loan Facility B $40 $40 LIBOR bps 2/9/2025 Total $400 $339 LIBOR: London Interbank Offered Rate The stated interest rate of LIBOR plus.75% or LIBOR plus 2.00% is subject to borrowing base conditions. As of June 30, 207, the stated rate on the facility is LIBOR plus 2.00%. 3

14 Distribution and Common Stock Information Distribution Data Date Declared Record Date Payment Date Regular Distribution Per Share Special Distribution Per Share August, 207 September 29, 207 October 6, 207 $ May, 207 June 30, 207 July 7, 207 $ February 22, 207 March 3, 207 April 7, 207 $ November, 206 December 3, 206 January 7, 207 $ August 2, 206 September 30, 206 October 7, 206 $ May 3, 206 June 30, 206 July 5, 206 $ February 25, 206 March 3, 206 April 5, 206 $ November 3, 205 December 3, 205 January 28, 206 $ August 4, 205 September 30, 205 October 5, 205 $ May 3, 205 June 30, 205 July 5, 205 $ February 25, 205 March 3, 205 April 30, 205 $ December 30, 204 December 23, 204 January 30, 205 $0.45 $0.08 September 29, 204 September 24, 204 October 3, 204 $ June 27, 204 June 7, 204 July 3, 204 $0.4 - March 28, 204 March 7, 204 April 30, 204 $ December 0, 203 December 0, 203 January 30, 204 $0.22 $0.0 October 7, 203 September 27, 203 October 2, 203 $0.9 - July 7, 203 June 28, 203 July 22, 203 $ Common Stock Data Quarter Ended High Low End of Period Quarter Ended High Low End of Period June 30, 207 $25.09 $22.25 $22.52 March 3, 206 $20.00 $7.4 $9.60 March 3, 207 $25.43 $22.5 $24.64 December 3, 205 $20.37 $8.40 $9.00 December 3, 206 $23.65 $20.77 $23.52 September 30, 205 $25.9 $7.9 $8.4 September 30, 206 $22.26 $9.98 $2.77 June 30, 205 $23.65 $20.33 $23.65 June 30, 206 $20.02 $9.34 $9.99 March 3, 205 $2.3 $20.05 $20.66 First quarter 205 was a partial quarter, beginning March 8, 205, when the Company commenced trading on the New York Stock Exchange. 4