EX-99.1 2 a19-9285_3ex99d1.htm EX-99.1

Exhibit 99.1

 

 

Bain Capital Specialty Finance, Inc. Declares Second Quarter 2019 Dividend of $0.41 per Share and Announces March 31, 2019 Financial Results

 

BOSTON — May 8, 2019 — Bain Capital Specialty Finance, Inc. (“BCSF” or the “Company” ) (NYSE: BCSF)  today announced that its Board of Directors has declared a dividend of $0.41 per share for the second quarter of 2019 and announced its financial results for the first quarter ended March 31, 2019.

 

“We’re pleased with the company’s results in the first quarter, driven by the performance of our underlying portfolio companies, which reflects our rigorous underwriting approach and the deep experience of our broader investment platform,” said Michael Ewald, Chief Executive Officer of the Company. “At the same time, we also continue to focus on structuring our liabilities as efficiently as possible to help drive the future success of the company.”

 

QUARTERLY HIGHLIGHTS

 

·                  The Company announced a dividend of $0.41 per share for the second quarter of 2019 payable to shareholders of record as of June 28, 2019 (1).

·                  Net investment income for the quarter ended March 31, 2019 was $21.2 million or $0.41 per share, as compared to $19.8 million or $0.41 per share for the quarter ended December 31, 2018.

·                  Net income for the quarter ended March 31, 2019 was $39.3 million or $0.76 per share, as compared to ($9.9) million or ($0.21) per share for the quarter ended December 31, 2018.

·                  Net asset value per share was $19.81 as of March 31, 2019, an increase of 1.8% from $19.46 as of December 31, 2018.

·                  As announced on February 19, 2019, the Company entered into a new $350.0 million credit facility with Citibank. Borrowings will bear interest at rate to three-month LIBOR plus 1.60% during the one year investment period. The interest rate will reset to LIBOR plus 2.60% after the reinvestment period through maturity date, February 19, 2022.

·                  As announced on May 6, 2019, the Company and Antares Capital LP (“Antares”), its joint venture partner, have restructured the ABC Complete Financing Solution LLC (“ABCS”). The Company formed BCSF Complete Financing Solution LLC (“BCSF Unitranche”), which received 44.737%, its proportionate share, of all assets previously held by ABCS. In addition as part of the restructure, the Company entered into $666.6 million credit agreement with JP Morgan Chase Bank. The maturity date of the facility is November 29, 2022.

·                  On May 7, 2019, the Company’s Board of Directors authorized the Company to repurchase up to $50 million of its outstanding common stock in accordance with safe harbor rules under the Securities Exchange Act of 1934. Any such repurchases will depend upon market conditions and there is no guarantee that the Company will repurchase any particular number of shares or any shares at all.

 

 

Selected Financial Highlights

 

(dollar amounts in thousands)

 

Q1 2019

 

Q4 2018

 

Net investment income per share

 

$

0.41

 

$

0.41

 

Net investment income

 

$

21,243

 

$

19,774

 

Earnings per share

 

$

0.76

 

$

(0.21

)

Dividends declared and payable

 

$

0.41

 

$

0.41

 

 

 

 

As of March 31,

 

As of December 31,

 

(dollar amounts in thousands)

 

2019

 

2018

 

Total fair value of investments

 

$

1,829,940

 

$

1,727,806

 

Total assets

 

1,995,944

 

1,791,014

 

Total net assets

 

1,019,834

 

1,001,629

 

Net asset value per share

 

$

19.81

 

$

19.46

 

 

PORTFOLIO AND INVESTMENT ACTIVITY

 

·                  For the three months ended March 31, 2019, BCSF invested $273.9 million in 45 portfolio companies across 21 different industries, including investments in the Antares Bain Capital Complete Financing Solution LLC (“ABCS JV”). BCSF had $190.6 million of principal repayments and sales in the quarter. On a net basis, our investments in the quarter totaled $83.3 million.

 

(dollar amounts in millions)

 

Q1 2019

 

Q4 2018

 

Investment Fundings

 

$

273.9

 

$

451.8

 

Sales and Repayments

 

190.6

 

42.7

 

Net Investment Activity

 

83.3

 

409.1

 

 

·                  As of March 31, 2019, the Company’s investment portfolio had a fair value of $1,829.9 million, which included the ABCS JV fair value of $335.4 million.

·                  As of March 31, 2019 the investment portfolio based on fair value consisted of:

 

Investment Portfolio at FV

 

$ in Millions

 

% of Total

 

First lien senior secured

 

$

1,131.8

 

61.9

%

First lien last out

 

28.4

 

1.6

 

Second lien senior secured

 

232.6

 

12.7

 

Subordinated debt

 

39.6

 

2.2

 

Corporate bonds

 

27.8

 

1.5

 

Investment vehicle

 

335.4

 

18.3

 

Equity interest

 

26.5

 

1.4

 

Preferred equity

 

7.7

 

0.4

 

Warrants

 

0.1

 

—

 

Total

 

$

1,829.9

 

100.0

%

 

 

·                  As of March 31, 2019, the weighted average gross yield on the investment portfolio was 8.8% (2) and 96.1% of total investments at fair value were in floating rate securities.

·                  As of March 31, 2019, there were no investments on non-accrual status.

 

FIRST QUARTER 2019 OPERATING RESULTS

 

·                  For the three months ended March 31, 2019 and December 31, 2018, total investment income was $39.9 million and $33.7 million, respectively.

·                  Total expenses before taxes for the three months ended March 31, 2019 and December 31, 2018, were $18.6 million and $14.0 million, respectively.

·                  Net investment income after taxes for the three months ended March 31, 2019 was $21.2 million or $0.41 per share, compared with $19.8 million or $0.41 per share for the three months ended December 31, 2018.

·                  During the three months ended March 31, 2019, the Company had net realized and unrealized gains of $18.1 million, compared to net realized and unrealized losses of $29.6 million during the three months ended December 31, 2018.

·                  Net increase in net assets resulting from operations for the three months ended March 31, 2019 was $39.3 million, or $0.76 per share.

 

CAPITAL and LIQUIDITY

 

·                  At March 31, 2019, BCSF had cash and cash equivalents and foreign cash of $80.6 million.

·                  BCSF had total principal debt outstanding of $916.9 million including $358.3 million outstanding in the BCSF Revolving Credit Facility with Goldman Sachs, $192.9 million outstanding in the Citi Revolving Credit Facility and $363.7 million outstanding of the 2018-1 Notes.

·                  Undrawn capacity in our BCSF Revolving Credit Facility totaled $141.7 million and undrawn capacity in our Citi Revolving Credit Facility totaled $157.1 million as of March 31, 2019.

·                  For the three months ended March 31, 2019, the weighted average interest rate on debt outstanding was 4.9%.

 

 

CONFERENCE CALL INFORMATION

 

A conference call to discuss the Company’s financial results will be held live at 9:00 a.m. Eastern Time on May 9, 2019. Please visit BCSF’s webcast link located on the Events & Presentation page of the Investor Resources section of BCSF’s website http://www.baincapitalbdc.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: 1-877-407-4018

·                  International: 1-201-689-8471

·                  Conference ID: 13689623

 

All callers will need to enter the Conference ID followed by the # sign and reference “Bain Capital Specialty Finance” once connected with the operator. All callers are asked to dial in 10-15 minutes prior to the call so that name and company information can be collected.

 

Replay Information:

 

An archived replay will be available approximately three hours after the conference call concludes through May 16, 2019 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: 13689623

 

 

ENDNOTES

 

(1)         The $0.41 per share dividend is payable on July 29, 2019 to holders of record as of June 28, 2019.

(2)         Information through March 31, 2019. Computed for debt investments based upon the annual interest rate as of March 31, 2019, divided by the total par amount of investments. For investments with floating interest rates, the yield calculation is computed using the contract rate data as of March 31, 2019. Weighted average yield for the Company’s Equity Interest in ABCS (Antares Bain Capital Complete Financing Solution LLC) represents the weighted average levered yield of the Company’s proportionate investment in ABCS at March 31, 2019. Weighted average yield for Equity Interest in ABCS is computed based upon the sum of (i) the weighted average of the interest rate of investments held by ABCS less (ii) the weighted average interest rate of the ABCS Facility, divided by the Company’s par amount in ABCS. Total weighted average gross yield is the weighted average of the yields of the Company’s debt investments and its Equity Interest in ABCS. The weighted average gross yield does not represent the total return to our stockholders. Gross yield does not reflect fees and expenses of the Company and does not represent the return a stockholder would receive.  If fees and expenses were included in the calculation, the yield would be lower.

 

 

Bain Capital Specialty Finance, Inc.

 

Consolidated Statements of Assets and Liabilities

 

 

 

As of

 

As of

 

 

 

March 31, 2019

 

December 31, 2018

 

 

 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

Investments at fair value:

 

 

 

 

 

Non-controlled/non-affiliate investments (amortized cost of $1,481,673,496 and $1,449,749,445, respectively)

 

$

1,469,128,402

 

$

1,422,837,431

 

Controlled affiliate investment (amortized cost of $348,095,945 and $296,647,530, respectively)

 

354,091,548

 

298,248,240

 

Non-controlled/affiliate investment (amortized cost of $6,720,000 and $6,720,000, respectively)

 

6,720,000

 

6,720,000

 

Cash and cash equivalents

 

79,140,512

 

14,692,877

 

Foreign cash (cost of $1,657,573 and $588,622, respectively)

 

1,478,627

 

591,113

 

Restricted Cash

 

14,009,400

 

17,986,541

 

Collateral on forward currency exchange contracts

 

403,790

 

3,790

 

Deferred financing costs

 

3,872,902

 

4,017,802

 

Interest receivable on investments

 

7,973,786

 

6,250,621

 

Prepaid insurance

 

—

 

1,517

 

Receivable for sales and paydowns of investments

 

40,235,589

 

1,633,739

 

Other assets

 

3,701,001

 

—

 

Unrealized appreciation on forward currency exchange contracts

 

6,038,508

 

9,321,758

 

Dividend receivable

 

9,150,109

 

8,708,670

 

Total Assets

 

$

1,995,944,174

 

$

1,791,014,099

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Revolving credit facilities

 

$

551,194,090

 

$

271,264,902

 

2018-1 Notes (net of unamortized debt issuance costs of $1,997,725 and $2,040,320, respectively)

 

363,702,275

 

363,659,680

 

Offering costs payable

 

1,730,959

 

1,819,892

 

Interest payable

 

5,095,949

 

4,835,339

 

Payable for investments purchased

 

24,370,068

 

119,165,882

 

Base management fee payable

 

4,500,941

 

2,950,412

 

Incentive fee payable

 

2,103,341

 

3,300,398

 

Accounts payable and accrued expenses

 

2,304,869

 

1,280,770

 

Distributions payable

 

21,107,677

 

21,107,677

 

Total Liabilities

 

976,110,169

 

789,384,952

 

 

 

 

 

 

 

Commitments and Contingencies (See Note 10)

 

 

 

 

 

 

 

 

 

 

 

Net Assets

 

 

 

 

 

Preferred stock, $0.001 par value per share, 10,000,000,000 shares authorized, none issued and outstanding as of March 31, 2019 and December 31, 2018, respectively

 

$

—

 

$

—

 

Common stock, par value $0.001 per share, 100,000,000,000 and 100,000,000,000 shares authorized, 51,482,137 and 51,482,137 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively

 

51,482

 

51,482

 

Paid in capital in excess of par value

 

1,034,255,352

 

1,034,255,352

 

Total distributable earnings (loss)

 

(14,472,829

)

(32,677,687

)

Total Net Assets

 

1,019,834,005

 

1,001,629,147

 

Total Liabilities and Total Net assets

 

$

1,995,944,174

 

$

1,791,014,099

 

Net asset value per share

 

$

19.81

 

$

19.46

 

 

 

Bain Capital Specialty Finance, Inc.

 

Consolidated Statements of Operations

(Unaudited)

 

 

 

For the Three Months Ended
March 31,

 

For the Three Months Ended
March 31,

 

 

 

2019

 

2018

 

Income

 

 

 

 

 

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

 

 

 

 

 

Interest from investments

 

$

30,387,622

 

$

12,615,297

 

Dividend income

 

15,533

 

—

 

Other income

 

21,731

 

114,004

 

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

 

30,424,886

 

12,729,301

 

Investment income from controlled affiliate investments:

 

 

 

 

 

Interest from investments

 

107,293

 

21,288

 

Dividend income

 

9,357,644

 

4,707,978

 

Total investment income from controlled affiliate investments

 

9,464,937

 

4,729,266

 

Total investment income

 

39,889,823

 

17,458,567

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

Interest and debt financing expenses

 

$

10,545,687

 

$

4,288,897

 

Base management fee

 

6,751,412

 

3,247,562

 

Incentive fee

 

4,085,628

 

2,004,548

 

Professional fees

 

550,432

 

523,677

 

Directors fees

 

105,140

 

68,250

 

Other general and administrative expenses

 

841,177

 

174,692

 

Total expenses before fee waivers

 

22,879,476

 

10,307,626

 

Base management fee waiver

 

(2,250,471

)

(1,623,781

)

Incentive fee waiver

 

(1,982,287

)

—

 

Total expenses, net of fee waivers

 

18,646,718

 

8,683,845

 

Net investment income before taxes

 

21,243,105

 

8,774,722

 

Excise tax expense

 

—

 

309

 

Net investment income after taxes

 

21,243,105

 

8,774,413

 

 

 

 

 

 

 

Net realized and unrealized gains (losses)

 

 

 

 

 

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

 

(849,933

)

257,702

 

Net realized gain on foreign currency transactions

 

5,885

 

279,145

 

Net realized gain (loss) on forward currency exchange contracts

 

3,633,076

 

(3,317,385

)

Net change in unrealized depreciation on foreign currency translation

 

(198,161

)

(17,344

)

Net change in unrealized appreciation (depreciation) on forward currency exchange contracts

 

(3,283,250

)

941,491

 

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

 

14,366,920

 

2,575,854

 

Net change in unrealized appreciation on controlled affiliate investments

 

4,394,893

 

1,865,229

 

Total net gains

 

18,069,430

 

2,584,692

 

 

 

 

 

 

 

Net increase in net assets resulting from operations

 

$

39,312,535

 

$

11,359,105

 

 

 

 

 

 

 

Per Common Share Data

 

 

 

 

 

Basic and diluted net investment income per common share

 

$

0.41

 

$

0.30

 

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

 

$

0.76

 

$

0.39

 

Basic and diluted weighted average common shares outstanding

 

51,482,137

 

29,133,586

 

 

 

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, L.P., an SEC-registered investment adviser and a subsidiary of Bain Capital Credit, L.P. Since commencing investment operations on October 13, 2016, and through March 31, 2019, BCSF has invested approximately $2,463.5 million 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

 

Certain information contained herein may constitute “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “seek,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” “target,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events may differ materially from those reflected or contemplated in such forward-looking statements. These statements are not guarantees of future events and are subject to risks, uncertainties, and other factors, some of which are beyond BCSF’s control and are difficult to predict, that could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation, the risks, uncertainties and other factors identified in BCSF’s filings with the SEC. Investors should not place undue reliance on these forward-looking statements, which apply only as of the date on which BCSF makes them. BCSF does not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law.

 

Investor Contact:

 

investors@baincapitalbdc.com

 

Media Contact:

 

Charlyn Lusk

Tel. +1 646 502 3549

clusk@stantonprm.com