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Barings BDC (BBDC)

Barings BDC, Inc. is a publicly traded, externally managed investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Barings BDC seeks to invest primarily in senior secured loans to private U.S. middle market companies that operate across a wide range of industries. Barings BDC's investment activities are managed by its investment adviser, Barings LLC, a leading global asset manager based in Charlotte, NC with $345 billion* of AUM firm-wide.

Company profile

Ticker
BBDC
Exchange
Website
CEO
Eric Lloyd
Employees
Incorporated
Location
Fiscal year end
Former names
Triangle Capital CORP
SEC CIK
Subsidiaries
Barings BDC Finance • Barings BDC Senior Funding I, LLC • Energy Hardware Holdings, Inc. • Mercury Acquisition Sub, Inc. • MVC Cayman, a Cayman Island limited liability company • MVC Financial Services, Inc. ...
IRS number
61798488

BBDC stock data

Analyst ratings and price targets

Last 3 months

Investment data

Data from SEC filings
Securities sold
Number of investors

Calendar

9 Aug 22
1 Oct 22
31 Dec 22
Quarter (USD) Jun 22 Mar 22 Dec 21 Sep 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
17 Jun 22 Stephen R Byers Common Stock ("Shares") Buy Acquire P No No 9.27 236 2.19K 18,121
3 Jun 22 Stephen R Byers Common Stock ("Shares") Buy Acquire P No No 10.375 1,850 19.19K 17,885
9 May 22 Stephen R Byers Common Stock ("Shares") Buy Acquire P No No 10.22 235 2.4K 16,035
9 May 22 Stephen R Byers Common Stock ("Shares") Buy Acquire P No No 10.25 15,800 161.95K 15,800
15 Mar 22 Jeffrey Chillag Common Stock ("Shares") Other Acquire J No No 10.16 1,118 11.36K 4,873.528
15 Mar 22 Jeffrey Chillag Common Stock ("Shares") Other Acquire J No No 10.15 1,382 14.03K 3,755.528
13F holders Current Prev Q Change
Total holders 0 0
Opened positions 0 0
Closed positions 0 0
Increased positions 0 0
Reduced positions 0 0
13F shares Current Prev Q Change
Total value 0 0
Total shares 0 0
Total puts 0 0
Total calls 0 0
Total put/call ratio
Largest owners Shares Value Change
Largest transactions Shares Bought/sold Change

Financial report summary

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Risks
  • Our financial condition and results of operations will depend on our ability to manage and deploy capital effectively.
  • Our investment portfolio is and will continue to be recorded at fair value as determined in good faith by our Board of Directors and, as a result, there is and will continue to be uncertainty as to the value of our portfolio investments.
  • We operate in a highly competitive market for investment opportunities, which could reduce returns and result in losses.
  • There are potential conflicts of interest, including the management of other investment funds and accounts by Barings, which could impact our investment returns.
  • Barings may exercise significant influence over us in connection with its ownership of our common stock.
  • Barings, its investment committee, or its affiliates may, from time to time, possess material non-public information, limiting our investment discretion.
  • Our ability to enter into transactions with Barings and its affiliates is restricted.
  • We are subject to risks associated with investing alongside other third parties, including our joint ventures.
  • The fee structure under the Amended and Restated Advisory Agreement may induce Barings to pursue speculative investments and incur leverage, which may not be in the best interests of our stockholders.
  • Barings' liability is limited under the Amended and Restated Advisory Agreement, and we are required to indemnify Barings against certain liabilities, which may lead Barings to act in a riskier manner on our behalf than it would when acting for its own account.
  • Barings is able to resign as our investment adviser and/or our administrator upon 60 days’ notice, and we may not be able to find a suitable replacement within that time, or at all, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.
  • Our long-term ability to fund new investments and make distributions to our stockholders could be limited if we are unable to renew, extend, replace or expand our current borrowing arrangements, or if financing becomes more expensive or less available.
  • Regulations governing our operation as a BDC will affect our ability to, and the way in which we, raise additional capital.
  • Our financing agreements contain various covenants, which, if not complied with, could accelerate our repayment obligations thereunder, thereby materially and adversely affecting our liquidity, financial condition, results of operations and ability to pay distributions.
  • Incurring additional leverage may magnify our exposure to risks associated with changes in leverage, including fluctuations in interest rates that could adversely affect our profitability.
  • We may in the future determine to fund a portion of our investments with preferred stock, which would magnify the potential for gain or loss and the risks of investing in us in the same way as our borrowings.
  • Our Board of Directors may change our investment objectives, operating policies and strategies without prior notice or stockholder approval, the effects of which may be adverse.
  • We will be subject to corporate-level U.S. federal income tax if we are unable to maintain our tax treatment as a RIC under Subchapter M of the Code, which will adversely affect our results of operations and financial condition.
  • We may not be able to pay distributions to our stockholders, our distributions may not grow over time, a portion of distributions paid to our stockholders may be a return of capital and investors in any debt securities we may issue may not receive all of the interest income to which they are entitled.
  • We may have difficulty paying our required distributions if we recognize income before or without receiving cash representing such income.
  • Because we intend to distribute substantially all of our income to our stockholders to maintain our tax treatment as a RIC, we will continue to need additional capital to finance our growth.
  • There is no assurance that any future share repurchase plans will result in future repurchases of our common stock or enhance long-term stockholder value, and repurchases, if any, could affect our stock price and increase its volatility and will diminish our cash reserves.
  • We are highly dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect our liquidity, financial condition and results of operations.
  • Cybersecurity risks and cyber incidents may adversely affect our business or the business of our portfolio companies by causing a disruption to our operations or the operations of our portfolio companies, a compromise or corruption of our confidential information or the confidential information of our portfolio companies and/or damage to our business relationships or the business relationships of our portfolio companies, all of which could negatively impact the business, financial condition and operating results of us or our portfolio companies.
  • Our business and operations may be negatively affected by securities litigation or stockholder activism, which could cause us to incur significant expense, hinder execution of our investment strategy and impact our stock price.
  • Our investments in portfolio companies may be risky, and we could lose all or part of our investment.
  • The lack of liquidity in our investments may adversely affect our business.
  • Price declines and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our net asset value through increased net unrealized depreciation.
  • Our failure to make follow-on investments in our portfolio companies could impair the value of our portfolio.
  • Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in such companies and such portfolio companies may not generate sufficient cash flow to service their debt obligations to us.
  • There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims.
  • Second priority liens on collateral securing loans that we make to our portfolio companies may be subject to control by senior creditors with first priority liens. If there is a default, the value of the collateral may not be sufficient to repay in full both the first priority creditors and us.
  • Covenant-Lite Loans may expose us to different risks, including with respect to liquidity, price volatility, ability to restructure loans, credit risks and less protective loan documentation, than is the case with loans that contain financial maintenance covenants.
  • Our investments in foreign companies may involve significant risks in addition to the risks inherent in U.S. investments.
  • We may expose ourselves to risks if we engage in hedging transactions.
  • If we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a BDC or be precluded from investing according to our current business strategy.
  • We are a non-diversified investment company within the meaning of the 1940 Act, and therefore we are not limited with respect to the proportion of our assets that may be invested in securities of a single issuer.
  • We generally will not control our portfolio companies.
  • Prepayments of our debt investments by our portfolio companies could adversely impact our results of operations and reduce our return on equity.
  • Any unrealized losses we experience on our loan portfolio may be an indication of future realized losses, which could reduce our income available for distribution.
  • Defaults by our portfolio companies may harm our operating results.
  • We may not realize gains from our equity investments.
  • Our investments in asset-backed securities are subject to additional risks.
  • Our investments in collateralized loan obligation vehicles are subject to additional risks.
  • We may be subject to risks associated with syndicated loans.
  • Our special situations investments involve a high degree of credit and market risk.
  • Shares of closed-end investment companies, including BDCs, frequently trade at a discount to their net asset value, and may trade at premiums that may prove to be unsustainable.
  • Investing in our securities may involve an above average degree of risk.
  • The market price of our securities may be volatile and fluctuate significantly.
  • We may be unable to invest a significant portion of the net proceeds raised from our offerings on acceptable terms, which would harm our financial condition and operating results.
  • Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock.
  • If we sell common stock at a discount to our net asset value per share, stockholders will experience immediate dilution in an amount that may be material.
  • Provisions of the Maryland General Corporation Law and our charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.
  • If we issue preferred stock and/or debt securities, the net asset value and market value of our common stock may become more volatile.
  • There is a risk that investors in our common stock may not receive a specified level of dividends or that our dividends may not grow over time and that investors in any debt securities we may issue may not receive all of the interest income to which they are entitled.
  • Terms relating to redemption may materially adversely affect your return on any debt securities that we may issue.
  • Future offerings of debt securities, which would be senior to our common stock upon liquidation, or equity securities, which could dilute our existing stockholders and may be senior to our common stock for the purposes of distributions, may harm the value of our common stock.
  • You may have a current tax liability on distributions reinvested in our common stock pursuant to our dividend reinvestment plan or otherwise but would not receive cash from such distributions to pay such tax liability.
  • A downgrade, suspension or withdrawal of the credit rating, if any, assigned by a rating agency to us or any of our outstanding unsecured notes, or change in the debt markets could cause the liquidity or market value of our securities to decline significantly.
  • Sales of shares of the Company’s common stock after the completion of the Sierra Merger may cause the market price of the Company’s common stock to decline.
  • The Company’s stockholders will experience a reduction in percentage ownership and voting power in the combined company as a result of the Sierra Merger.
  • The NAV per share of the Company’s common stock will be diluted if the Company issues shares at a price below the then-current NAV per share in connection with the Sierra Merger.
  • The Company may be unable to realize the benefits anticipated by the Sierra Merger, including estimated cost savings, or it may take longer than anticipated to realize such benefits.
  • The announcement and pendency of the proposed Sierra Merger could adversely affect both the Company’s and Sierra’s business, financial results and operations.
  • If the Sierra Merger does not close, neither the Company nor Sierra will benefit from the expenses incurred in their pursuit of the Sierra Merger and, under certain circumstances, Sierra may be required to pay an $11.0 million termination fee and to reimburse expenses incurred in connection with the Sierra Merger by the Company and Barings, subject to a maximum expense reimbursement payment of $2.0 million.
  • The termination of the Sierra Merger Agreement could negatively impact the Company.
  • Except in specified circumstances, if the Sierra Merger is not completed by March 31, 2022, either Sierra or the Company may choose not to proceed with the Sierra Merger.
  • The Sierra Merger is subject to closing conditions, including stockholder approvals, that, if not satisfied or waived, will result in the Sierra Merger not being completed, which may result in material adverse consequences to the Company’s business and operations.
  • Sierra and the Company will be subject to contractual restrictions while the Sierra Merger is pending, including restrictions on pursuing alternatives to the Sierra Merger.
  • Subject to applicable law, each party may waive one or more conditions to the Sierra Merger without resoliciting approval from its respective stockholders.
  • The market price of the Company’s common stock after the Sierra Merger may be affected by factors different from those affecting the Company’s common stock or Sierra’s common stock currently.
  • The Sierra Merger may trigger certain “change of control” provisions and other restrictions in certain of the Company’s and Sierra’s contracts and the failure to obtain any required consents or waivers could adversely impact the combined company.
  • The combined company may not be able to obtain financing for additional capital requirements.
  • The Company has incurred and expects to incur substantial transaction fees and costs in connection with the Sierra Merger, whether or not the Sierra Merger is completed.
  • Litigation filed against Sierra or the Company in connection with the Sierra Merger could result in substantial costs and could delay or prevent the Sierra Merger from being completed.
  • Global capital markets could enter a period of severe disruption and instability or an economic recession. These conditions have historically affected and could again materially and adversely affect debt and equity capital markets in the United States and around the world and could impair our portfolio companies and harm our operating results.
  • Terrorist attacks, acts of war, national disasters, outbreaks or pandemics may affect any market for our securities, impact the businesses in which we invest and harm our business, operating results and financial condition.
  • We may experience fluctuations in our quarterly results.
  • Economic recessions or downturns could impair our portfolio companies and harm our operating results.
  • Changes to U.S. tariff and import/export regulations may have a negative effect on our portfolio companies and, in turn, harm us.
  • Changes in laws or regulations governing our operations may adversely affect our business or cause us to alter our business strategy.
Management Discussion
  • Net increases or decreases in net assets resulting from operations can vary substantially from period to period due to various factors, including recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of net changes in net assets resulting from operations may not be meaningful.
  • The change in total investment income for the three and six months ended June 30, 2022, as compared to the three and six months ended June 30, 2021, was primarily due to an increase in the average size of our portfolio, increased dividends from portfolio companies and joint venture investments and an increase in acceleration of unamortized OID and unamortized loan origination fee income associated with repayments of loans. The increase in the average size of our portfolio was largely due to the increased middle-market investment opportunities and the investments acquired as part of the Sierra Acquisition. This increase was partially offset by a decrease in payment-in-kind (“PIK”) interest income. For the three and six months ended June 30, 2022, dividends from portfolio companies and joint venture investments were $7.2 million and $14.9 million, respectively, as compared to $0.4 million and $0.5 million, respectively, for the three and six months ended June 30, 2021. The amount of our outstanding debt investments was $2,162.5 million as of June 30, 2022, as compared to $1,463.6 million as of June 30, 2021. This increase is in part due to the acquisition of investment assets in the Sierra Acquisition. The weighted average yield on the principal amount of our outstanding debt investments other than non-accrual debt investments was 7.6% as of June 30, 2022, as compared to 7.4% as of June 30, 2021. For the three and six months ended June 30, 2022, acceleration of unamortized OID income and unamortized loan origination fees totaled $2.9 million and $3.1 million, respectively, as compared to $2.2 million and $2.6 million, respectively, for the three and six months ended June 30, 2021. For the three and six months ended June 30, 2022, PIK interest income was $2.5 million and $5.3 million, respectively, as compared to $3.4 million and $6.5 million, respectively, for the three and six months ended June 30, 2021.
  • Interest and other financing fees during the three and six months ended June 30, 2022 were attributable to borrowings under the February 2019 Credit Facility, the August 2025 Notes, the November Notes, the February Notes and the November 2026 Notes (each as defined below under “Liquidity and Capital Resources”). Interest and other financing fees during the three and six months ended June 30, 2021 were attributable to borrowings under the February 2019 Credit Facility, the August 2025 Notes, the November Notes and the February Notes. The increase in interest and other financing fees for the three and six months ended June 30, 2022 as compared to the three and six months ended June 30, 2021, was primarily attributable to the issuance of the November 2026 Notes and increased borrowings under the February 2019 Credit Facility.

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