At this time, we welcome everyone to Barings BDC's Earnings Conference Call for the Quarter Ended September 30, 2024. All participants are in listen-only mode. A question and answer session will follow the company's formal remarks. Today's call is being recorded, and a replay will be available approximately two hours after the conclusion of the call on the company's website at investors.barings.com under the investor relations section. At this time, I will turn the call over to Joe Mazzoli, Head of Investor Relations for Barings BDC. Please note that this call may contain forward-looking statements.

Thank you. This call may contain forward-looking statements that include statements regarding the company's goals, beliefs, strategies, future operating results, and cash flows. Although the company believes these statements are reasonable, actual results could differ materially from those projected in forward-looking statements. These statements are based on various underlying assumptions and are subject to numerous uncertainties and risks, including those disclosed under the sections titled "Risk Factors" and "Forward-Looking Statements" in the company's quarterly report on Form 10-Q for the quarter ended September 30, 2024, as filed with the Securities and Exchange Commission. Barings BDC undertakes no obligation to update or revise any forward-looking statements unless required by law. I will now turn the call over to Eric Lloyd, Chief Executive Officer of Barings BDC.

Thanks, Joe, and good morning, everyone. We appreciate you joining us for today's call. Please note that throughout today's call, we will be referring to our third quarter 2024 earnings presentation that is posted on the Investor Relations section of our website. On the call today, I am joined by Barings BDC's President, Matt Freund, Chief Financial Officer, Elizabeth Murray, and Barings Head of Global Private Finance and BBDC Portfolio Manager, Bryan High. In the third quarter, BBDC delivered another strong and consistent set of results fueled by best-in-class credit performance and the strength and stability of our franchise. Our focus on the top of the capital structure investments and sponsor-backed middle market issuers continues to serve our investors well. Our focus on the core of the middle market is reflective of lower leverage levels and more attractive risk-adjusted returns, which is why we find this to be the best segment of the market for BBDC and our shareholders. The core portfolio is complemented by a selection of non-sponsored and platform investments that we believe benefit our shareholders in the form of higher potential returns and diversification. Our portfolio strategy is outlined in greater detail on slide five, and we continue to successfully invest throughout the market and deliver compelling returns to our shareholders. As we reflect on the first three quarters of 2024, the performance of BBDC has been strong against a relatively benign economic backdrop. Interest rates, while elevated, have been stable for several quarters. Credit performance appears to be holding up broadly across the industry, save a few idiosyncratic examples. Inflation has started to recede, and with it, interest rates are likely to follow in the quarters to come. As we have discussed previously, we believe that a reduction in interest rates, long hoped for soft landing…

Thanks, Eric. Recall that BBDC is managed by Barings LLC, a credit-focused asset manager with over $431 billion of assets under management. The bulk of BBDC's portfolio is sourced from the global private finance team, an organization with more than one hundred investment professionals located around the globe providing financing solutions to high-quality, market-leading middle market companies sponsored by top-tier private equity firms. BBDC deployed $125 million of capital this quarter, offset by $121 million of sales and repayments, resulting in net deployments of $4 million. Repayments during the quarter included a large position inherited from Sierra Income, Aviation Technical Services, and reflect the continued execution of our stated strategy to rotate out of acquired assets. As Eric noted, we are executing the strategy we have been telegraphing for the past eighteen months, simplifying the portfolio and selectively investing in what we believe are the most compelling direct lending opportunities in the market. LBO activity during 2024 remains muted, but the third quarter began exhibiting some green shoots as deployment opportunities improved over the first and second quarters. Data reviewed by our liquid high yield team, which we use as a proxy for market data related to private markets, revealed that only 13% of transaction volume through the year-to-date July period was new money transactions, with the overwhelming majority of capital being dedicated towards refinancings and repricings. The long-term historical average for new money transactions ranges between 40% and 45%. While we are encouraged that activity and pipeline opportunities have improved in recent months, we cannot be certain if this marks a sustained trend or a temporary pop ahead of the election cycle. We are optimistic in the former. Nevertheless, the scale of BBDC's portfolio and the number of issuers remain an important differentiator, with approximately one-third of gross fundings…

Thanks, Matt. On slide sixteen, you can see the full bridge of the NAV per share movement in the third quarter. NAV per share was $11.32 as of September 30, which is a decrease of 0.4% over the prior quarter and an increase of 0.6% year over year. Our net investment income exceeded the $0.26 per share dividend by $0.03 per share, or 10%. Net unrealized appreciation from investments, GSAs, and FX equals two cents and was offset by net realized losses on the portfolio and FX of $0.10 per share. The net realized loss on the portfolio was predominantly due to the exit of our investment in ANG Software, which was reclassed from unrealized depreciation. The valuation of the credit support agreements increased by approximately $0.7 million. The fair value of the Sierra CSA decreased from $32.6 million in the second quarter to $32.2 million as of September 30. During the third quarter, the Sierra portfolio had sales and repayments of approximately $30 million and had 28 positions remaining in the portfolio, down from 29 positions as of June 30. The fair value of the MVC CSA increased from $18 million to $19 million as of September 30, predominantly due to rolling the maturity of the contract forward one quarter with our four positions remaining. Our net investment income was $0.29 per share for the quarter, or $0.30 per share on a pretax basis, compared to $0.40 per share in the prior quarter and $0.31 per share for the third quarter of 2023. Investment income in the quarter was primarily driven by repayment activity at the end of the second quarter and the beginning of the third quarter that was redeployed late in the third quarter and early in the fourth quarter, and dividends from joint ventures and platform…

So we are not sure about others on the line, but we are experiencing some technical difficulties here. Some of us have received a couple of emails saying that other people are having issues. We will stay available for any questions that people have, but we need to get those access through the system. And so I just ask for your patience to remain, and we are communicating with the people at the company now to try and make sure we can get the questions so we can make sure we are responsive to any questions from any analysts or any shareholders. We are having a difficult time accessing any questions, and for that, we apologize. It is not on our end; it is through the system and the organization that arranged the call. What I would encourage you to do, many of you know the executive management team, you can reach out to us directly, the investor hotline, whatever is the most appropriate from your perspective. Because we want to make sure we are responsive to any questions from anybody. And we greatly apologize for this inconvenience. With that, I am just going to terminate the call rather than ask people just to hold on, understanding I am not sure when this would be resolved.