BCSF Bain Capital Specialty Finance Inc

Bain Capital Specialty Finance, Inc. (NYSE: BCSF, the “Company”, “our” or “we”) today announced financial results for the fourth quarter and fiscal year ended December 31, 2024, and that its Board of Directors (the “Board”) has declared a dividend of $0.42 per share for the first quarter of 2025 and has also declared additional dividends totaling $0.12 per share for 2025.

“BCSF delivered strong quarterly and full year 2024 results as we continued to benefit from high net investment income and stable credit performance, supported by an active year of investment activity where we saw record originations,” said Michael Ewald, Chief Executive Officer of BCSF. “As a result of our strong performance, we are pleased to announce another year of additional dividends for our shareholders. Looking ahead in 2025, we believe the Company is well positioned to continue to source and execute attractive middle market investment opportunities and drive further value for our shareholders.”

QUARTERLY HIGHLIGHTS

• Net investment income (NII) per share was $0.52, equating to an annualized NII yield on book value of 11.8%(1);
• Net income per share was $0.34, equating to an annualized return on book value of 7.8%(1);
• Net asset value per share as of December 31, 2024 was $17.65, as compared to $17.76 as of September 30, 2024;
• Gross and net investment fundings were $547.8 million and $42.7 million, respectively; ending net debt-to-equity was 1.13x, as compared to 1.09x as of September 30, 2024(2);
• Investments on non-accrual represented 1.3% and 0.2% of the total investment portfolio at amortized cost and fair value, respectively, as of December 31, 2024;
• Subsequent to quarter-end, the Company’s Board of Directors declared a dividend of $0.42 per share for the first quarter of 2025 payable to stockholders of record as of March 17, 2025 and has also declared additional dividends totaling $0.12 per share for 2025, to be distributed in four consecutive quarterly payments of $0.03 per share per quarter. The first additional dividend is payable to stockholders of record as of March 17, 2025(3); and
• On February 6, 2025, the Company closed an offering of $350.0 million aggregate principal amount of 5.950% unsecured notes due 2030. The net proceeds of the offering were primarily used to repay outstanding secured indebtedness under its financing arrangements and for general corporate purposes.

SELECTED FINANCIAL HIGHLIGHTS

($ in millions, unless otherwise noted)

Q4 2024

 

Q3 2024

 

Net investment income per share

$

0.52

 

$

0.53

 

Net investment income

$

33.6

 

$

34.0

 

Earnings per share

$

0.34

 

$

0.51

 

Dividends per share declared and payable

$

0.45

 

$

0.45

 

($ in millions, unless otherwise noted)

As of December 31, 2024

 

As of September 30, 2024

 

Total fair value of investments

$

2,431.2

 

$

2,408.0

 

Total assets

$

2,632.2

 

$

2,543.7

 

Total net assets

$

1,139.7

 

$

1,146.6

 

Net asset value per share

$

17.65

 

$

17.76

 

PORTFOLIO AND INVESTMENT ACTIVITY

For the three months ended December 31, 2024, the Company invested $547.8 million in 88 portfolio companies, including $317.3 million in 15 new companies and $230.5 million in 73 existing companies. The Company had $505.1 million of principal repayments and sales in the quarter, resulting in net investment fundings of $42.7 million.

Investment Activity for the Quarter Ended December 31, 2024:

($ in millions)

Q4 2024

 

Q3 2024

 

Investment Fundings

$

547.8

 

$

413.1

 

Sales and Repayments

$

505.1

 

$

248.0

 

Net Investment Activity

$

42.7

 

$

165.1

 

As of December 31, 2024, the Company’s investment portfolio had a fair value of $2,431.2 million, comprised of investments in 168 portfolio companies operating across 30 different industries.

Investment Portfolio at Fair Value as of December 31, 2024:

Investment Type

$ in Millions

 

% of Total

 

First Lien Senior Secured Loan

$

1,557.8

 

 

64.1

%

Second Lien Senior Secured Loan

 

30.1

 

 

1.2

 

Subordinated Debt

 

53.4

 

 

2.2

 

Preferred Equity

 

170.9

 

 

7.0

 

Equity Interest

 

230.6

 

 

9.5

 

Warrants

 

0.6

 

 

0.0

 

Investment Vehicles

 

387.8

 

 

16.0

 

Subordinated Note in ISLP

 

190.7

 

 

7.8

 

Equity Interest in ISLP

 

55.4

 

 

2.3

 

Subordinated Note in SLP

 

146.5

 

 

6.1

 

Preferred and Equity Interest in SLP

 

(4.8

)

 

(0.2

)

Total

$

2,431.2

 

 

100

%

As of December 31, 2024, the weighted average yield on the investment portfolio at amortized cost and fair value were 11.7% and 11.8%, respectively, as compared to 12.1% and 12.1%, respectively, as of September 30, 2024(4). 92% of the Company’s debt investments at fair value were in floating rate securities.

As of December 31, 2024, five portfolio companies were on non-accrual status, representing 1.3% and 0.2% of the total investment portfolio at amortized cost and fair value, respectively.

As of December 31, 2024, ISLP’s investment portfolio had an aggregate fair value of $655.8 million, comprised of investments in 35 portfolio companies operating across 15 different industries. The investment portfolio on a fair value basis was comprised of 96.6% first lien senior secured loans, 0.8% second lien senior secured loans and 2.6% equity interests. 100% of ISLP’s debt investments at fair value were in floating rate securities.

As of December 31, 2024, SLP’s investment portfolio had an aggregate fair value of $1,399.2 million, comprised of investments in 100 portfolio companies operating across 27 different industries. The investment portfolio on a fair value basis was comprised of 99.4% first lien senior secured loans, 0.4% second lien senior secured loans and 0.2% equity interests. 99.9% of SLP’s debt investments at fair value were in floating rate securities.

RESULTS OF OPERATIONS

For the three months ended December 31, 2024 and September 30, 2024, total investment income was $73.3 million and $72.5 million, respectively.

Total expenses (before taxes) for the three months ended December 31, 2024 and September 30, 2024 were $38.4 million and $37.5 million, respectively.

Net investment income for the three months ended December 31, 2024 and September 30, 2024 was $33.6 million or $0.52 per share and $34.0 million or $0.53 per share, respectively.

During the three months ended December 31, 2024, the Company had net realized and unrealized losses of $11.5 million.

Net increase in net assets resulting from operations for the three months ended December 31, 2024 was $22.1 million, or $0.34 per share.

CAPITAL AND LIQUIDITY

As of December 31, 2024, the Company had total principal debt outstanding of $1,395.2 million, including $442.7 million outstanding in the Company’s Sumitomo Credit Facility, $352.5 million outstanding of the debt issued through BCC Middle Market CLO 2019-1 LLC, $300.0 million outstanding in the Company’s senior unsecured notes due March 2026 and $300.00 million outstanding in the Company’s senior unsecured notes due October 2026.

For the three months ended December 31, 2024, the weighted average interest rate on debt outstanding was 5.1%, as compared to 5.1% for the three months ended September 30, 2024.

As of December 31, 2024, the Company had cash and cash equivalents (including foreign cash) of $53.5 million, restricted cash and cash equivalents of $45.5 million, $8.3 million of unsettled trades, net of receivables and payables of investments, and $412.3 million of capacity under its Sumitomo Credit Facility. As of December 31, 2024, the Company had $560.9 million of undrawn investment commitments.

On February 6, 2025, the Company closed an offering of $350.0 million aggregate principal amount of 5.950% unsecured notes due 2030. The net proceeds of the offering were primarily used to repay outstanding secured indebtedness under its financing arrangements and for general corporate purposes.

As of December 31, 2024, the Company’s debt-to-equity and net debt-to-equity ratios were 1.22x and 1.13x, respectively, as compared to 1.14x and 1.09x, respectively, as of September 30, 2024(2).

Endnotes

(1)

 

Net investment income yields and net income returns are calculated on average net assets, or book value, for the respective periods shown.

 

 

 

(2)

 

Net debt-to-equity represents principal debt outstanding less cash and cash equivalents and unsettled trades, net of receivables and payables of investments.

 

 

 

(3)

 

The first quarter dividend is payable on March 31, 2025 to stockholders of record as of March 17, 2025.

 

 

 

(4)

 

The weighted average yield is computed as (a) the annual stated interest rate or yield earned on the relevant accruing debt and other income producing securities plus amortization of fees and discounts on the performing debt and other income producing investments, divided by (b) the total relevant investments at amortized cost or fair value. The weighted average yield does not represent the total return to our stockholders.

CONFERENCE CALL INFORMATION

A conference call to discuss the Company’s financial results will be held live at 8:00 a.m. Eastern Time on February 28, 2025. Please visit BCSF’s webcast link located on the Events & Presentations page of the Investor Resources section of BCSF’s website at http://www.baincapitalspecialtyfinance.com for a slide presentation that complements the Earnings Conference Call.

Participants are also invited to access the conference call by dialing one of the following numbers:

• Domestic: 1-800-267-6316
• International: 1-203-518-9783
• Conference ID: BAIN

All participants will need to reference “Bain Capital Specialty Finance - Fourth Quarter and Fiscal Year Ended December 31, 2024 Earnings Conference Call” once connected with the operator. All participants are asked to dial in 10-15 minutes prior to the call.

Replay Information:

An archived replay will be available approximately three hours after the conference call concludes through March 7, 2025 via a webcast link located on the Investor Resources section of BCSF’s website, and via the dial-in numbers listed below:

• Domestic: 1-844-512-2921
• International: 1-412-317-6671
• Conference ID: 11158241

Bain Capital Specialty Finance, Inc.

 

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share data)

 

 

 

As of

 

 

As of

 

 

 

December 31, 2024

 

 

December 31, 2023

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Investments at fair value:

 

 

 

 

 

 

 

 

Non-controlled/non-affiliate investments (amortized cost of $1,784,019 and $1,615,061, respectively)

 

$

 

1,773,742

 

 

$

 

1,593,360

 

Non-controlled/affiliate investments (amortized cost of $77,269 and $132,650, respectively)

 

 

 

75,733

 

 

 

 

147,971

 

Controlled affiliate investments (amortized cost of $585,702 and $554,123, respectively)

 

 

 

581,714

 

 

 

 

557,012

 

Cash and cash equivalents

 

 

 

51,562

 

 

 

 

42,995

 

Foreign cash (cost of $2,640 and $6,865, respectively)

 

 

 

1,963

 

 

 

 

6,405

 

Restricted cash and cash equivalents

 

 

 

45,541

 

 

 

 

63,084

 

Collateral on forward currency exchange contracts

 

 

 

9,755

 

 

 

 

7,613

 

Deferred financing costs

 

 

 

4,591

 

 

 

 

2,802

 

Interest receivable on investments

 

 

 

39,164

 

 

 

 

37,169

 

Receivable for sales and paydowns of investments

 

 

 

37,760

 

 

 

 

4,310

 

Prepaid insurance

 

 

 

197

 

 

 

 

210

 

Unrealized appreciation on forward currency exchange contracts

 

 

 

4,690

 

 

 

 

—

 

Dividend receivable

 

 

 

5,745

 

 

 

 

9,417

 

Total Assets

 

$

 

2,632,157

 

 

$

 

2,472,348

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Debt (net of unamortized debt issuance costs of $4,929 and $7,567, respectively)

 

$

 

1,390,270

 

 

$

 

1,255,933

 

Interest payable

 

 

 

13,860

 

 

 

 

13,283

 

Payable for investments purchased

 

 

 

29,490

 

 

 

 

11,453

 

Unrealized depreciation on forward currency exchange contracts

 

 

 

1,185

 

 

 

 

2,260

 

Base management fee payable

 

 

 

9,160

 

 

 

 

8,929

 

Incentive fee payable

 

 

 

4,696

 

 

 

 

7,327

 

Accounts payable and accrued expenses

 

 

 

14,771

 

 

 

 

9,581

 

Distributions payable

 

 

 

29,053

 

 

 

 

27,116

 

Total Liabilities

 

 

 

1,492,485

 

 

 

 

1,335,882

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies (See Note 11)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Assets

 

 

 

 

 

 

 

 

Common stock, par value $0.001 per share, 100,000,000,000 and 100,000,000,000 shares authorized, 64,562,265 and 64,562,265 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively

 

 

 

65

 

 

 

 

65

 

Paid in capital in excess of par value

 

 

 

1,159,493

 

 

 

 

1,168,384

 

Total distributable loss

 

 

 

(19,886

)

 

 

 

(31,983

)

Total Net Assets

 

 

 

1,139,672

 

 

 

 

1,136,466

 

Total Liabilities and Total Net Assets

 

$

 

2,632,157

 

 

$

 

2,472,348

 

 

 

 

 

 

 

 

 

 

Net asset value per share

 

$

 

17.65

 

 

$

 

17.60

 

See Notes to Consolidated Financial Statements

Bain Capital Specialty Finance, Inc.

 

Consolidated Statements of Operations

(in thousands, except share and per share data)

(Unaudited)

 

 

 

For the Year Ended December 31,

 

 

 

 

2024

 

 

 

2023

 

 

 

2022

 

Income

 

 

 

 

 

 

 

 

 

 

 

 

Investment income from non-controlled/non-affiliate investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest from investments

 

$

 

179,956

 

 

$

 

184,921

 

 

$

 

138,984

 

Dividend income

 

 

 

1,958

 

 

 

 

62

 

 

 

 

634

 

PIK income

 

 

 

22,680

 

 

 

 

20,536

 

 

 

 

13,495

 

Other income

 

 

 

18,597

 

 

 

 

10,561

 

 

 

 

15,091

 

Total investment income from non-controlled/non-affiliate investments

 

 

 

223,191

 

 

 

 

216,080

 

 

 

 

168,204

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income from non-controlled/affiliate investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest from investments

 

 

 

3,140

 

 

 

 

9,890

 

 

 

 

7,470

 

Dividend income

 

 

 

920

 

 

 

 

4,815

 

 

 

 

4,109

 

PIK income

 

 

 

461

 

 

 

 

2,308

 

 

 

 

1,542

 

Total investment income from non-controlled/affiliate investments

 

 

 

4,521

 

 

 

 

17,013

 

 

 

 

13,121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income from controlled affiliate investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest from investments

 

 

 

39,145

 

 

 

 

33,739

 

 

 

 

19,819

 

Dividend income

 

 

 

25,796

 

 

 

 

30,957

 

 

 

 

18,401

 

Total investment income from controlled affiliate investments

 

 

 

64,941

 

 

 

 

64,696

 

 

 

 

38,220

 

Total investment income

 

 

 

292,653

 

 

 

 

297,789

 

 

 

 

219,545

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Interest and debt financing expenses

 

 

 

74,688

 

 

 

 

80,008

 

 

 

 

52,318

 

Base management fee

 

 

 

35,644

 

 

 

 

36,095

 

 

 

 

34,669

 

Incentive fee

 

 

 

28,872

 

 

 

 

25,456

 

 

 

 

19,572

 

Professional fees

 

 

 

3,494

 

 

 

 

2,561

 

 

 

 

2,959

 

Directors fees

 

 

 

695

 

 

 

 

716

 

 

 

 

707

 

Other general and administrative expenses

 

 

 

10,108

 

 

 

 

7,981

 

 

 

 

5,777

 

Total expenses, net of fee waivers

 

 

 

153,501

 

 

 

 

152,817

 

 

 

 

116,002

 

Net investment income before taxes

 

 

 

139,152

 

 

 

 

144,972

 

 

 

 

103,543

 

Income tax expense, including excise tax

 

 

 

4,475

 

 

 

 

3,357

 

 

 

 

837

 

Net investment income

 

 

 

134,677

 

 

 

 

141,615

 

 

 

 

102,706

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized and unrealized gains (losses)

 

 

 

 

 

 

 

 

 

 

 

 

Net realized loss on non-controlled/non-affiliate investments

 

 

 

(18,174

)

 

 

 

(62,903

)

 

 

 

(1,725

)

Net realized gain (loss) on non-controlled/affiliate investments

 

 

 

7,727

 

 

 

 

19,006

 

 

 

 

(1,355

)

Net realized gain (loss) on foreign currency transactions

 

 

 

(320

)

 

 

 

(5,134

)

 

 

 

5,292

 

Net realized gain (loss) on forward currency exchange contracts

 

 

 

2,304

 

 

 

 

(407

)

 

 

 

20,894

 

Net realized loss on extinguishment of debt

 

 

 

—

 

 

 

 

—

 

 

 

 

(747

)

Net change in unrealized appreciation on foreign currency translation

 

 

 

(251

)

 

 

 

4,050

 

 

 

 

(3,644

)

Net change in unrealized appreciation on forward currency exchange contracts

 

 

 

5,765

 

 

 

 

(2,322

)

 

 

 

(5,259

)

Net change in unrealized appreciation on non-controlled/non-affiliate investments

 

 

 

11,424

 

 

 

 

49,524

 

 

 

 

(50,309

)

Net change in unrealized appreciation on non-controlled/affiliate investments

 

 

 

(16,857

)

 

 

 

(24,271

)

 

 

 

27,190

 

Net change in unrealized appreciation on controlled affiliate investments

 

 

 

(6,877

)

 

 

 

4,217

 

 

 

 

12,437

 

Total net gain (loss)

 

 

 

(15,259

)

 

 

 

(18,240

)

 

 

 

2,774

 

Net increase in net assets resulting from operations

 

$

 

119,418

 

 

$

 

123,375

 

 

$

 

105,480

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net investment income per share of common stock

 

$

 

2.09

 

 

$

 

2.19

 

 

$

 

1.59

 

Basic and diluted increase in net assets resulting from operations per share of common stock

 

$

 

1.85

 

 

$

 

1.91

 

 

$

 

1.63

 

Basic and diluted weighted average common stock outstanding

 

 

 

64,562,265

 

 

 

 

64,562,265

 

 

 

 

64,562,265

 

See Notes to Consolidated Financial Statements

About Bain Capital Specialty Finance, Inc.

Bain Capital Specialty Finance, Inc. is an externally managed specialty finance company focused on lending to middle market companies. BCSF is managed by BCSF Advisors, LP, an SEC-registered investment adviser and a subsidiary of Bain Capital Credit, LP. Since commencing investment operations on October 13, 2016, and through December 31, 2024, BCSF has invested approximately $8,784.3 billion in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments. BCSF’s investment objective is to generate current income and, to a lesser extent, capital appreciation through direct originations of secured debt, including first lien, first lien/last out, unitranche and second lien debt, investments in strategic joint ventures, equity investments and, to a lesser extent, corporate bonds. BCSF has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended.

Forward-Looking Statements

This letter may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this letter may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the U.S. Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this letter.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250227450988/en/

Investor Contact: Katherine Schneider Tel. (212) 803-9613 investors@baincapitalbdc.com

Media Contact: Charlyn Lusk Tel. (646) 502-3549 clusk@stantonprm.com