At this time, I would like to welcome everyone to the Barings BDC, Inc. conference call for the quarter and year ended December 31, 2025. All participants are in a listen-only mode. A question-and-answer session will follow. 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 www.baringsbdc.com under the Investor Relations section. I will now turn the call over to Joseph Mazzoli, Head of Investor Relations for Barings BDC, Inc. Please note that this call may contain forward-looking statements, including 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. Statements are based on various underlying assumptions that are subject to numerous uncertainties and risks, including those disclosed under the sections titled “Risk Factors” and “Forward-Looking Statements” in the company's annual report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the Securities and Exchange Commission. Barings BDC, Inc. undertakes no obligation to update or revise any forward-looking statements unless required by law. I will now turn the call over to Tom McDonald, Chief Executive Officer of Barings BDC, Inc. Thanks, Joe, and good morning, everyone. On the call today, I am joined by Barings BDC, Inc.’s President, Matthew Freund, Chief Financial Officer, Elizabeth A. Murray, Barings Head of Global Private Finance and BBDC Portfolio Manager, Bryan D. High. Before I discuss our quarterly and annual results, I would like to take a moment to speak about the leadership transition that we recently implemented and my involvement with the BDC franchise going forward. As many of you know, I assumed the role of CEO of Barings BDC, Inc. effective January 1. Prior to stepping into this position, I spent most of my career deeply rooted in fundamental credit research and underwriting, portfolio management, and investor alignment across multiple strategies within Barings. Having navigated multiple credit cycles and managed leveraged credit businesses for decades, I bring a perspective that reinforces my conviction in the strength and durability of our investment process, and importantly, in our continued ability to deliver value for our shareholders. What has been immediately clear in my early months is what I long believed to be true. Barings BDC, Inc. benefits from a best-in-class direct origination platform focused on the core middle market. This differentiated sourcing capability, paired with our disciplined underwriting and strong alignment with shareholders, represents a powerful combination—one that positions us well to drive attractive long-term risk-adjusted returns. While I bring a fresh perspective, the strategy, process, and philosophy that define BBDC remain firmly intact. Our approach is working, and my focus is on enhancing the processes that already operate effectively and complementing the strengths of an exceptional existing team. It is my intention to accelerate existing initiatives and implement additional initiatives, all with a clear focus on ultimately improving ROE.

I have had the privilege of connecting with many of our stakeholders following the leadership transition, and I look forward to continuing that dialogue in the weeks and months ahead. In the fourth quarter, BBDC delivered strong net investment income accompanied by excellent credit performance within the Barings-originated portion of the portfolio. Origination activity across the platform during the fourth quarter reflected continued success in our core strategies. Net deployment was influenced by fund-level leverage, and the fourth quarter reflected a period of net repayments consistent with our prior guidance. A strong and highly diversified portfolio, combined with a benign credit environment and our focus on top-of-the-capital-structure investments in middle market issuers, has continued to serve our investors well. We focus on the core middle market given its lower leverage and stronger risk-adjusted returns, making it the most compelling segment for BBDC and our shareholders. In addition, our emphasis on sectors that perform resiliently across economic environments provides an additional level of stability to our portfolio. This combination of senior secured financing solutions, core middle market focus, defensive non-cyclical sectors, and a global footprint offers our investors strong relative value and a meaningful differentiation within the broader BDC landscape. BBDC’s portfolio has performed largely as designed. Our defensive diversified issuer base is built as an all-weather portfolio. We believe this approach serves investors well regardless of the broader macroeconomic conditions, which, as Matt will touch on momentarily, we feel are broadly favorable. At the same time, we are beginning to see increased dispersion across managers in the space. Our experience suggests that underwriting rigor often reveals itself over multi-year periods rather than quarters. As investors in private credit know, it can take three, four, or even five years for the portfolios to season and for credit performance to materialize. Importantly,…

Thanks, Tom. I would first like to comment on my excitement to have you as part of our team. Barings manages nearly $0.5 trillion of capital, primarily in credit and credit-related investments.

Point five. We recognize the increasing convergence between various markets,

And know that your significant experience in high yield, stressed, and distressed markets augments the capabilities of our team that will benefit our investors in the quarters to come. Turning to the topic on many investors’ minds: software and the prospects of AI impacting underlying credit portfolios. Software accounts for approximately 14% of the fair market value of the BBDC portfolio. For those that follow our public filings, you will notice that we have long used the Moody’s industry hierarchy for our industry classifications, which does not separate software as a distinct industry. Nevertheless, after reviewing our information, 14% of the portfolio is invested in issuers primarily providing software to their underlying customers. Our portfolio is under-indexed relative to other private credit portfolios, as we have historically avoided both annual recurring revenue loans as well as highly leveraged software issuers. We rarely provided the most aggressive leverage packages. As a consequence, we are often not perceived to be competitive in the eyes of the issuers and sponsors for these software assets. We stuck to our historical knitting, and the resulting software exposure reflects this approach. With that said, we believe the rhetoric related to an existential crisis within the software vertical is overblown. The current market tone is reminiscent of a few other periods in recent memory. During 2018, the U.S. initiated a trade war with China, with justified concerns that industrial and manufacturing businesses would experience headwinds, causing bankruptcies across the country. At the onset of the COVID pandemic during 2020, logical arguments were made that healthcare companies would be forever transformed, and loans to 2022, interest rates began a historical rise, ultimately leveling off at more than 500 basis points by mid-2023. The rapid rise in interest rates caused many investors to express concern about indebted companies and…

Thanks, Matt. As both Tom and Matt said, BBDC continues to deliver strong, consistent earnings, maintain exceptional credit quality, and provide attractive risk-adjusted returns for our fellow shareholders. Turning to our results for the fourth quarter, NAV per share ended the year at $11.09, which was essentially flat compared to the third quarter at $11.10, representing less than a 0.1% decrease quarter over quarter. The slight quarter-over-quarter movement reflects a combination of modest realized losses of $0.05 per share, offset by $0.02 per share of unrealized appreciation, $0.01 per share from share repurchases, and continued stable earnings generation from the portfolio, over-earning the dividend for the fourth quarter by $0.01 per share. The net realized loss on the portfolio was driven primarily by the loss on the exit of our investments in Ruffalo and Avanti and the restructuring of our investments in Eurofence, partially offset by the sale of our equity investments in Jones Fish and CJS Global. These exits and restructures were predominantly reclassed from net unrealized depreciation. The valuation of the Sierra credit support agreement increased by approximately $7,700,000 from $52,800,000 in the third quarter to $60,500,000 as of December 31. This increase was primarily driven by the sales, repayment, and return of capital within the underlying portfolio of the remaining Sierra investments, as well as updated assumptions around the maturity profile. During the fourth quarter, the Sierra portfolio generated approximately $24,300,000 of sales and repayments, along with a $21,900,000 return of capital distribution from the Sierra JV. At year-end, we had 12 positions remaining in the portfolio with a value $70,000,000 of repayments of approximately $32,000,000, down from 16 positions and $79,000,000 as of September 30. On a year-over-year basis, we reduced the Sierra portfolio by roughly 75%, including sales and return of capital. In addition, during…

Thank you. We will now be conducting a question-and-answer session. Our first question today is coming from Finian O’Shea from Wells Fargo Securities. Your line is now live. Finian Patrick O’Shea: Hey, everyone. Good morning. I will start with, I guess, Tom, some interesting opening remarks on initiatives—anything you are—you find yourself working on in terms of the accelerating existing initiatives part? And then also on the new ones, to improve ROE as you outlined—any sort of heavy lifting or big changes we might anticipate there?

Yes. Thanks, Fin. So yes, a number of initiatives that we have undertaken here. I think in part, really, they are a continuation of what the team has already done. So as you know, we have got many assets on the balance sheet, legacy assets that have come over from some of the integration of the other companies we have acquired. So my focus has been really on trying to accelerate exits of those. Many of those, as you know, do not earn interest. So as we can redeploy some of those proceeds into interest-earning assets and accelerate our exit from those, obviously, that is an immediate enhancement for ROE. So that has been a big focus of mine. I think within the CSA, another area where we have tried to make an effort to wind down the assets there to the extent that we can. We know that the CSA has clearly been a story for us for quite some time. I think it has been very beneficial for shareholders in protecting them from losses, but that thing is beginning to grow in size. And so as you know, earlier this year, we did terminate one of those. And so while we cannot guarantee anything, it is our effort—going to be a strong effort of ours as a team—to make sure we address that in a timely manner and again to try to have some sort of an event around that where we could potentially realize proceeds there and again redeploy those into interest-earning assets. Along the same lines, we continue to wind down some of the JVs that—some of them have been problematic for us. We are focused on Jocassee, obviously, as a JV that has worked to our benefit. We continue to believe that is actually a…

Yes. No, I think that—I do not know that we increase the percentage ownership, but I certainly think we can increase our investment there in direct activity down there. So—and therefore, increase absolute dollars back in—in sort of form of the dividend. So as we consolidate the other JVs and wind those down, and they are virtually at this point wound down, I think we redirect investment into that entity. And again, we share all the same risk at the BDC level as we do down at Jocassee, and you will get the benefit of the leverage down there and the enhanced return to shareholders. So I think that will be a focus as we move forward. And I think it has been very successful for us over time. And we continue to believe it will be. Finian Patrick O’Shea: Appreciate that. Thanks. I will do one final sort of market question. I am not sure if the esteemed Joseph Mazzoli is microphone-eligible, but a lot of news in the non-traded BDC market. It feels like the ground is shaking again this week. Anything you all are seeing or feeling on the ground of private retail investor sort of reluctance or hesitation or jitters on that sort of product format?

Yes. So Joe is not mic’d up, but I will certainly take that. We are working hand in hand on that as a team as well. And so—so obviously, the headlines have not been our friends really for four months now, and clearly news this week is not helping on that front at all. So for us, it is up to us to really reach out to investors and be a little more front-footed as we address some of the issues in the market. And I think we have done a good job with that. Our flows there have been good. We have not seen any material degradation in the pace of flows relative to what we saw last year. So we continue to believe that that is the case moving forward in the first couple of months of this year. I guess everybody will see it at the end of the first quarter here on what redemptions might look like. But as of now, we are just sort of fighting the battle of the headlines, and we do believe that that is what it is. And so, you know, I think everybody here is knowledgeable about the space and truly understands private credit, understands that it is a very viable—and I think we are in a good position there, but it is on us really to get that message out and to make sure that we alleviate investor concerns on that front.

Thanks, Tom.

Welcome.

Thank you. Our next question today is coming from Casey Alexander from Compass Point. Your line is now live.

Yes, morning. And Matt, I appreciate your comments trying to bring some relative perspective to the software market. I do have a follow-up question to that that I am actually going to direct to Tom because, Tom, you have a long history in the liquid credit markets. And an issue that you know investors continue to raise and would like to hear some commentary on is that in the liquid credit markets, the average price for a software loan is actually trading, in recent reports, around 90. And so I would like to hear how much you think that matters and how much you think that influences Barings and the third-party independent valuation firms when they go to mark the books at the end of the first quarter. Is that a relevant comp? Does it come into it? How much does it influence it? And what should investors expect?

Yes, that is a great question. So I believe that in the broadly syndicated loan space, the predominant player there are CLOs. And CLOs are very ratings-sensitive. They are also somewhat price-sensitive. But the reality is there has just been so much noise around it that I think people are just sort of hitting the sell button where they can. In a $2,000,000–$3,000,000 position, you have four or five people doing that—immediately you are going to see a two- to three-point backup in that loan. It will be a perfectly good credit. There will be no issues with it. Reasonable leverage, good cash flow. The businesses, in our opinion, are good. We have got a great analyst that covers that up there. So I think that a lot of that has to do with, not necessarily forced selling, but repositioning ahead of potential downgrades. I do not even see that really as something that is coming in the near term. We are going to have to see multiple quarters of results to see if some of the negative headlines come to fruition. Our personal belief is that it does not happen. The way that we across the Barings platform underwrite software is the recurring nature. It has got to be sort of vertically integrated enterprise value stuff. It is sort of really integral to companies’ core operations. And so where we are invested is in companies like that. So unfortunately, the headlines just force people into that sort of sell mode—sell first and sort of ask questions later—especially if it is only a $2,000,000 to $3,000,000 position, as many CLOs sort of have. And then so that then leads to who is going to buy that. And so with all the headlines, folks do not necessarily want to back up…

Well, that is a great answer. Thank you for that. My follow-on would be, in the past, when the liquid credit markets have offered a better risk-adjusted rate of return than the directly originated markets have, Barings has been willing to step into that market and try to take advantage of it to create, you know, some positive NAV accretion as some of those opportunities present themselves. Is that something that you are watching, thinking about? Is that a possibility at some point down the road if the mismatch between the liquid credit markets and the directly originated private credit markets gets too wide?

Yes. Yes. Absolutely. We would consider that. We do a lot of work with the high yield team. I obviously came from that group, and so a lot of respect for the team up there. And so they do a lot of work around this, and we will step into it where we think there is opportunity there. And so that is something that is clearly on our screen. And, you know, the way we approach BSLs, we will be very tactical about it. And so I do think there is an opportunity there as we need to see some of this air pocket in some of the names or if there is a general sell-off in BSLs. You know, we do know what sort of the top picks up there are. And so you can move in there, take very little credit risk, and just take advantage of the volatility. And so considering those names. And so you could see us potentially do that. It is a strategy that we are considering as we see that spacing or, you know, see the market evolve in terms of pricing there. Thank you for taking my questions.

All right. Thank you.

Thank you. Our next question today is coming from Robert Dodd from Raymond James. Your line is now live. Hi, good morning, everyone. Congrats on the quarter. You are one of the few green names on my screen today. On the two kind of like strategic initiatives. I mean, you talked about ideally liking to crystallize the Sierra CSA as well. But I mean, where would you like—if that—if you did, right, in the not too distant future, what are the areas that you would like to put that cap—I mean, obviously, you are talking about, you know, putting more into Jocassee. That is an equity—strategic equity—effectively, you know, Eclipse and Rocade have been great, but they do up as equity. They are income producing. Very different thing from what normal equity is. I mean, how would you like to allocate incremental capital across the different types of strategies you have done between straight lending, some strategic equity? I mean, what is kind of the vision for the mix over the next, you know, couple of years, so to speak?

Yes. So I mean, again, across the platform at Barings, you know, we have got great origination everywhere. I think we have leaned into sort of our capital—the complexity piece of private credit—and got excellent returns there. You referenced Rocade and Eclipse; those are two. We continue to work with the group there. I am actually on that investment committee as well. And so there are some really interesting risk-adjusted return investment opportunities on that platform that we will continue to do. I think that is definitely one area we will look to do that. As you know, I am a big believer in diversification in credit. So as more opportunities come there, I think you could see us diversify holdings in some of those names that have the complexity premium and very interesting opportunities there that come at 200–300 basis points wider on spread than what you can get right now in private credit. So that would be sort of one area of focus. As well, across the platform, sort of the asset-based lending opportunities, I think, that we may have as well could be interesting, as well as being tactical, right, because we see more volatility in the space. Clearly, the BSL piece would be an area where we could see some interesting opportunities. I think BB CLOs is an opportunity for us. So I think what you will see us do is be just a little more tactical in areas like that. And then again, always focused on the core of our GPF assets. But I think looking at a number of the origination platforms here on the private credit side at Barings, there is just a lot of opportunity for us—so we will continually evaluate where those stack up relative to GPF spreads and opportunities there. So there is a lot of choices we can make along that. And so that is part of my focus—one of the strategic initiatives, again, is to utilize the entire Barings origination platform to find the best risk-adjusted return opportunities and put them to work here.

Got it. Got it. Thank you. And then flipping to software, if I can. I mean, the average liquid bid is 90, but that is not a uniformed number, right? I mean, you know, it is—it is—you know, there is a lot trading higher than that. There are a few trading much lower than that, for example. When you look at your book, you know, the 14% that you said is software. I mean, obviously, you have avoided the types of—or tried to avoid the types of—business that are particularly vulnerable to AI displacement, and those are the ones that are trading with the—the ones that the market is concerned about. The ones in the liquid market—those are the ones that trade in the big discounts. How much exposure, if any, do you have to the same kind of businesses the liquid market has really, you know, taken out behind the woodshed, so to speak? I mean, obviously, I think it is low. You have been avoiding it, but do you have any?

Yes. No. We do not. We do not have any that are—you are talking about the liquid loans that are trading now in the low 80s. Those are the ones that are more highly levered names that are clearly—the ability for AI to disrupt some of those models is much more evident. And I think those are the ones. So there has been massive dispersion. So good high-quality names in software in syndicated are probably in the mid-90s at this point to 98 and just trading because they are associated with software. And then the ones that actually have real credit concerns, as you mentioned, are in the mid-80s and even lower. And so those are the ones that have been legacy investments for quite some time and have been sitting around four or five years. Many of them have already faced or are facing LME-type events. And so then you will see the trading price really gap down significantly. So we do not have exposure to those on the GPF platform. We have—AI has not come along as something that is a risk that recently we identified. It has been something that has been a core part of the underwriting for the team going back years now. So I think that is always something that has been considered, and we just do not have anything on our radar screens that would indicate that we have issues like that, where AI is an immediate disruptor and therefore will have future impacts on quarterly earnings, EBITDA, etcetera. So we feel pretty good about our investments in that space within the 14% exposure we have there.

Got it. One more if I can, to make Elizabeth’s life maybe more awful. Any consideration to shift throughout this categorization to GICS? I mean, GICS is increasingly becoming standard. Most BDCs use it. The fact that you do not does make it harder to compare between BBDC and, you know, most of the—universes—the liquid loan markets even disclose in GICS categories now. I mean, so yes, Moody’s has been your industry categorization for a long time, but would there be value in your view to actually switching to what is becoming more the industry standard?

Yes, Robert. Thanks for the question. And it is something that we have been talking about internally. Again, especially with the software piece, right? I know Matt kind of alluded to it in his commentary. So it is something that we are constantly looking at and discussing, especially from an SEC reporting perspective. But thank you for your question.

Okay. Thank you. We have reached the end of our question-and-answer session. I would like to turn the floor back over for any further or closing comments.

Okay. Thank you, operator, and thank you to all who participated today. As I begin my tenure as CEO, I look forward to deepening our engagement with investors and advancing our strategic priorities with the full BDC leadership team. BBDC is strongly positioned for the future, and we remain focused on delivering consistent value for our shareholders. Thank you.

Thank you. That does conclude today’s teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.