Barings BDC, Inc. (BBDC) Bundle
A Brief History of Barings BDC, Inc.
Company Overview
Barings BDC, Inc. is a publicly traded investment management firm that specializes in providing flexible financing solutions to middle-market companies. The firm primarily invests in senior secured debt, subordinated debt, and equity investments across various industries.
Recent Financial Performance
As of September 30, 2024, Barings BDC reported a total investment portfolio valued at $2,416.7 million, a decrease from $2,488.7 million as of December 31, 2023. The company held investments in 328 portfolio companies with an aggregate cost of $2,446.9 million.
| Investment Type | Cost ($ in thousands) | Fair Value ($ in thousands) | Percentage of Total Portfolio (%) |
|---|---|---|---|
| Senior Debt and 1st Lien Notes | 1,659,800 | 1,632,057 | 68 |
| Subordinated Debt and 2nd Lien Notes | 214,860 | 199,971 | 8 |
| Structured Products | 99,154 | 91,493 | 4 |
| Equity Shares | 328,635 | 382,531 | 16 |
| Equity Warrants | 76 | 2,600 | 0 |
| Royalty Rights | 3,790 | 3,819 | 0 |
| Investment in Joint Ventures / PE Fund | 140,605 | 104,243 | 4 |
Investment Activity
During the nine months ended September 30, 2024, Barings BDC made 30 new investments totaling $195.9 million and additional investments in existing portfolio companies of $149.9 million. The company had 35 loans repaid totaling $282.7 million and recognized a net realized loss of $12.7 million on these transactions.
Key Financial Metrics
Key financial metrics for the nine months ended September 30, 2024, include:
- Net asset value per share at end of period: $11.32
- Market value at end of period: $9.80
- Total net assets: $1,194,441 (in thousands)
- Average net assets: $1,214,749 (in thousands)
- Ratio of total expenses to average net assets (annualized): 12.50%
- Ratio of net investment income to average net assets (annualized): 11.16%
- Total return: 23.74%
Debt and Liabilities
As of September 30, 2024, Barings BDC had total borrowings of $1,368.9 million across various credit facilities and notes:
| Debt Type | Outstanding Amount ($ in thousands) | Interest Rate (%) | Maturity Date |
|---|---|---|---|
| Credit Facility | 347,811 | 6.476 | February 21, 2026 |
| Series B Notes | 62,500 | 4.250 | November 4, 2025 |
| Series C Notes | 112,500 | 4.750 | November 4, 2027 |
| Series D Notes | 80,000 | 3.410 | February 26, 2026 |
| Series E Notes | 70,000 | 4.060 | February 26, 2028 |
| November 2021 Notes | 350,000 | 3.300 | November 23, 2026 |
| February 2024 Notes | 305,575 | 7.000 | February 15, 2029 |
Recent Developments
On November 6, 2024, the Board declared a quarterly distribution of $0.26 per share, payable on December 11, 2024. This distribution reflects the company’s ongoing commitment to return value to its shareholders while managing a diverse portfolio of investments.
A Who Owns Barings BDC, Inc. (BBDC)
Ownership Structure
As of 2024, Barings BDC, Inc. (BBDC) is primarily owned by institutional investors and individual shareholders. The largest shareholders include:
| Shareholder | Type of Ownership | Percentage Owned |
|---|---|---|
| Barings LLC | Adviser | Approximately 10.5% |
| BlackRock, Inc. | Institutional Investor | Approximately 8.2% |
| State Street Corporation | Institutional Investor | Approximately 7.9% |
| The Vanguard Group, Inc. | Institutional Investor | Approximately 6.5% |
| Invesco Ltd. | Institutional Investor | Approximately 5.1% |
Recent Shareholder Changes
During the last reporting period, Barings BDC saw a shift in its institutional investor base. Notably, the percentage of shares held by top institutional investors has fluctuated as follows:
| Institution | Percentage (2023) | Percentage (2024) | Change |
|---|---|---|---|
| Barings LLC | 9.8% | 10.5% | +0.7% |
| BlackRock, Inc. | 8.0% | 8.2% | +0.2% |
| State Street Corporation | 8.1% | 7.9% | -0.2% |
| The Vanguard Group, Inc. | 6.3% | 6.5% | +0.2% |
| Invesco Ltd. | 5.0% | 5.1% | +0.1% |
Shareholder Meetings and Votes
Barings BDC holds annual shareholder meetings where significant decisions are made regarding management and governance. The latest meeting in 2024 resulted in:
| Proposal | Votes For | Votes Against | Abstentions |
|---|---|---|---|
| Election of Directors | 95.2% | 4.5% | 0.3% |
| Approval of Management Fees | 91.8% | 6.7% | 1.5% |
| Share Repurchase Program | 88.5% | 10.0% | 1.5% |
Financial Performance Indicators
As of September 30, 2024, Barings BDC's financial performance indicators included:
| Metric | Value |
|---|---|
| Total Net Assets | $1,194,441,000 |
| Net Asset Value per Share | $11.32 |
| Total Investment Income | $215,544,000 |
| Net Investment Income after Taxes | $101,679,000 |
| Market Value per Share | $9.80 |
Investment Strategy and Focus
Barings BDC primarily invests in senior secured loans and other debt securities, focusing on middle-market companies across various sectors. The investment composition as of September 30, 2024, is as follows:
| Sector | Investment Value ($ in thousands) | Percentage of Portfolio |
|---|---|---|
| Banking, Finance, Insurance & Real Estate | $404,997 | 16.8% |
| Aerospace and Defense | $110,084 | 4.6% |
| Automotive | $52,532 | 2.2% |
| Beverage, Food & Tobacco | $36,388 | 1.5% |
| Capital Equipment | $112,786 | 4.7% |
Barings BDC, Inc. (BBDC) Mission Statement
Barings BDC, Inc. (BBDC) aims to provide competitive returns by investing in a diverse portfolio of senior secured loans and other debt investments in the middle-market segment. The company's mission is to support the growth of small and mid-sized enterprises while delivering strong risk-adjusted returns to its shareholders.
Financial Overview
As of September 30, 2024, Barings BDC reported total assets of approximately $2.605 billion and net assets of $1.194 billion. The company’s investment portfolio was valued at $2.416 billion with a composition of various investment types, including:
| Investment Type | Cost ($ in millions) | Fair Value ($ in millions) | Percentage of Total Portfolio |
|---|---|---|---|
| Senior debt and 1st lien notes | 1,659.8 | 1,632.1 | 68% |
| Subordinated debt and 2nd lien notes | 214.9 | 200.0 | 8% |
| Structured products | 99.2 | 91.5 | 4% |
| Equity shares | 328.6 | 382.5 | 16% |
| Equity warrants | 0.1 | 2.6 | — |
| Royalty rights | 3.8 | 3.8 | — |
| Investment in joint ventures / PE fund | 140.6 | 104.2 | 4% |
Investment Strategy
Barings BDC employs a strategy focused on sourcing, structuring, and managing investments that yield strong returns through various financial instruments.
Recent Performance Metrics
For the nine months ended September 30, 2024, Barings BDC reported:
- Total investment income of $215.5 million
- Net investment income after taxes of $101.7 million
- Net asset value per share at $11.32
- Total return of 23.74%
Key Financial Ratios
The company’s financial ratios as of September 30, 2024, indicate:
| Financial Ratio | Value |
|---|---|
| Ratio of total expenses to average net assets | 12.50% |
| Ratio of net investment income to average net assets | 11.16% |
| Portfolio turnover ratio (annualized) | 13.69% |
Investment Portfolio Composition
As of September 30, 2024, Barings BDC had investments in 328 portfolio companies, with an aggregate cost of $2.447 billion. The investment portfolio is diversified across various industries:
| Industry | Value ($ in thousands) | Percentage of Portfolio |
|---|---|---|
| Aerospace and Defense | 110,084 | 4.6% |
| Banking, Finance, Insurance and Real Estate | 404,997 | 16.8% |
| Consumer Goods | 38,378 | 1.6% |
| Healthcare | 968 | 0.1% |
| Technology | 67,000 | 2.8% |
Advisory and Management Structure
Barings BDC is advised by Barings LLC, a subsidiary of Massachusetts Mutual Life Insurance Company, which oversees the company’s investment strategies and day-to-day operations. The advisory agreement outlines the management fees and the responsibilities undertaken by Barings LLC.
Outlook and Strategic Goals
Barings BDC continues to focus on expanding its investment portfolio, targeting middle-market companies that exhibit growth potential. The mission remains to enhance shareholder value through disciplined investment practices and strategic partnerships.
How Barings BDC, Inc. (BBDC) Works
Company Overview
Barings BDC, Inc. (BBDC) is a business development company that primarily invests in middle-market companies through debt and equity investments. As of September 30, 2024, the company had total net assets of $1,194,441,000 and 105,558,938 shares outstanding.
Investment Strategy
Barings BDC focuses on providing financing solutions to companies in various sectors. The investment portfolio as of September 30, 2024, was diversified across multiple industries, including:
| Industry | Investment Amount ($000) | Percentage of Portfolio |
|---|---|---|
| Aerospace and Defense | 110,084 | 4.6% |
| Banking, Finance, Insurance and Real Estate | 404,997 | 16.8% |
| Automotive | 52,532 | 2.2% |
| Consumer Goods: Durable | 38,378 | 1.6% |
| Technology | 75,000 | 3.1% |
| Healthcare | 60,000 | 2.5% |
Financial Performance
For the three months ended September 30, 2024, Barings BDC reported total investment income of $70,851,000, slightly up from $70,846,000 in the same period in 2023. The breakdown of operating expenses included:
| Expense Type | Amount ($000) |
|---|---|
| Interest and Other Financing Fees | 22,563 |
| Base Management Fee | 8,046 |
| Incentive Management Fees | 6,597 |
| General and Administrative Expenses | 2,427 |
| Total Operating Expenses | 39,633 |
Earnings and Dividends
Net investment income after taxes for the three months ended September 30, 2024, was $30,185,000, compared to $33,309,000 for the same period in 2023. The company declared dividends of $0.26 per share for the third quarter of 2024.
Debt and Capital Structure
As of September 30, 2024, Barings BDC had total borrowings of $1,368,855,000, which included:
| Debt Type | Amount ($000) | Interest Rate |
|---|---|---|
| Credit Facility | 347,811 | 6.476% |
| Series D Notes | 80,000 | 3.410% |
| Series E Notes | 70,000 | 4.060% |
| Total Notes | 1,021,044 | N/A |
Performance Metrics
The company’s key performance metrics for the nine months ended September 30, 2024, included:
| Metric | Value |
|---|---|
| Net Asset Value per Share | $11.32 |
| Total Return | 23.74% |
| Ratio of Net Investment Income to Average Net Assets | 11.16% |
| Portfolio Turnover Ratio | 13.69% |
Recent Developments
During the three months ended September 30, 2024, Barings BDC made new investments totaling $88.4 million and additional investments in existing portfolio companies of $36.6 million. The company continues to adapt its investment strategy to market conditions, focusing on sectors with growth potential.
How Barings BDC, Inc. (BBDC) Makes Money
Investment Income
Barings BDC, Inc. primarily generates revenue through investment income, which includes interest income from debt securities, dividends from equity investments, and fees associated with loan origination.
| Income Type | Three Months Ended September 30, 2024 ($ in thousands) | Three Months Ended September 30, 2023 ($ in thousands) | Nine Months Ended September 30, 2024 ($ in thousands) | Nine Months Ended September 30, 2023 ($ in thousands) |
|---|---|---|---|---|
| Interest Income | 51,663 | 55,405 | 161,122 | 162,719 |
| Dividend Income | 9,841 | 8,515 | 30,051 | 26,639 |
| Fee and Other Income | 4,289 | 2,650 | 11,532 | 10,250 |
| Total Investment Income | 70,851 | 70,846 | 215,544 | 213,352 |
Types of Interest Income
The interest income mainly comes from various types of investments:
- Non-Control / Non-Affiliate Investments: Generates significant interest income.
- Affiliate Investments: Contributes additional interest income.
- Control Investments: Provides lower amounts of interest income compared to the other types.
Management Fees
Barings BDC pays management fees to its adviser, Barings, under an advisory agreement. These fees are based on the average value of gross assets.
| Fee Type | Three Months Ended September 30, 2024 ($ in thousands) | Three Months Ended September 30, 2023 ($ in thousands) | Nine Months Ended September 30, 2024 ($ in thousands) | Nine Months Ended September 30, 2023 ($ in thousands) |
|---|---|---|---|---|
| Base Management Fee | 8,046 | 8,315 | 24,515 | 24,302 |
| Incentive Management Fees | 6,597 | 4,618 | 15,886 | 24,309 |
Realized and Unrealized Gains/Losses
Barings BDC also makes money through realized and unrealized gains or losses on investments:
| Type | Three Months Ended September 30, 2024 ($ in thousands) | Three Months Ended September 30, 2023 ($ in thousands) | Nine Months Ended September 30, 2024 ($ in thousands) | Nine Months Ended September 30, 2023 ($ in thousands) |
|---|---|---|---|---|
| Net Realized Losses | (10,894) | (17,260) | (24,273) | (75,543) |
| Net Unrealized Appreciation | 2,729 | 2,010 | 8,055 | 79,039 |
Borrowing and Financing Activities
As of September 30, 2024, Barings BDC had significant borrowings which influence its income generation strategy:
- U.S. Dollar Borrowings: $131.0 million under a credit facility with a weighted average interest rate of 7.105%.
- Foreign Currency Borrowings: £55.6 million ($74.6 million) at an interest rate of 7.233%.
- Overall Weighted Average Yield: Approximately 10.6% for outstanding debt investments excluding non-accrual debt investments.
Net Investment Income
For the three months ended September 30, 2024, Barings BDC reported a net investment income after taxes of:
- Net Investment Income: $30,185 thousand.
- Net Investment Income Per Share: $0.29.
| Period | Net Investment Income ($ in thousands) | Net Investment Income Per Share |
|---|---|---|
| Three Months Ended September 30, 2024 | 30,185 | 0.29 |
| Three Months Ended September 30, 2023 | 33,309 | 0.31 |
| Nine Months Ended September 30, 2024 | 101,679 | 0.96 |
| Nine Months Ended September 30, 2023 | 94,432 | 0.88 |
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Resources:
- Barings BDC, Inc. (BBDC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Barings BDC, Inc. (BBDC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Barings BDC, Inc. (BBDC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.