Good day, everyone and welcome to the Bain Capital Specialty Finance First Quarter ended March 31, 2025 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the conference over to Katherine Schneider, Investor Relations. Please go ahead.

Thanks, Nikkie. Good morning and welcome to the Bain Capital Specialty Finance first quarter ended March 31, 2025 conference call. Yesterday after market close, we issued our earnings press release and investor presentation of our quarterly results. A copy of which is available on Bain Capital Specialty Finance’s Investor Relations website. Following our remarks today, we will hold a question-and-answer session for analysts and investors. This call is being webcast and a replay will be available on our website. This call and the webcast are property of Bain Capital Specialty Finance and any authorized broadcast in any form is strictly prohibited. Any forward-looking statements made today do not guarantee future performance and actual results may differ materially. These statements are based on current management expectations, which include risks and uncertainties, which are identified in the Risk Factors section of our Form 10-Q that could cause actual results to differ materially from those indicated. Bain Capital Specialty Finance assumes no obligation to update any forward-looking statements at this time unless required to do so by law. Lastly, past performance does not guarantee future results. So with that, I’d like to turn the call over to our CEO, Michael Ewald.

Thanks, Katherine and good morning and thanks to all of you for joining us here on our earnings call. I am also joined today by Mike Boyle, our President; and our Chief Financial Officer, Amit Joshi. As usual, in terms of agenda for the call, I’ll start with an overview of our first quarter results and then provide some thoughts on our performance, the current market environment positioning. Thereafter, Mike and Amit will discuss our investment portfolio and financial results in great detail. As usual, we’ll also leave some time for questions at the end. So yesterday, after closed, we delivered solid first quarter results. Q1 net investment income per share was $0.50, representing an annualized yield on book value of 11.3%. Our net investment income was well in excess of our regular dividend, with 119% dividend coverage. Q1 earnings per share were $0.44, reflecting an annualized return on book value of 10.0%. Our results were driven by high-quality interest income earned from our middle-market borrowers and stable credit performance across our portfolio. Our net asset value per share was $17.64, down $0.01 per share from the prior quarter end. Subsequent to quarter end, our Board declared a second quarter dividend equal to $0.42 per share payable to record date holders as of June 16, 2025. The Board also declared an additional dividend of $0.03 per share for shareholders of record as of June 16, 2025 as we previously announced in February. The total dividends for the second quarter to $0.45 per share or a 10.2% annualized return on ending value as of March 31, which we believe represents an attractive yield for our shareholders. The first quarter was [Technical Difficulty] a busy start to the year beginning in January, while volumes and trends throughout the quarter, increased volatility and…

Thanks, Michael. Good morning, everyone. I’ll start with our investment activity for the first quarter and then provide an update in more detail on our portfolio. New fundings during the first quarter were $277 million into 89 portfolio companies, including $140 million in 13 new companies, $134 million in 75 existing companies and $2 million into our senior loan program. Sales and repayment activity totaled approximately $246 million, resulting in net investment fundings of $31 million quarter-over-quarter. Our fundings were split with 51% of total fundings made to new portfolio companies versus 49% to existing companies. This quarter, we remain focused on investing in first lien senior secured loans, with 90% of our investments made into first lien structures, 9% in subordinated debt and 1% into equity. Investments made in the quarter continued to favor defensive industries such as healthcare, high tech and business services. For our select investments within auto and capital equipment sectors, we provided capital to service-oriented companies within these end markets or manufacturers with the domestic footprints. Turning to the investment portfolio. At the end of the first quarter, the size of our portfolio at fair value was $2.5 billion across a diversified set of 175 companies operating across 29 different industries. We have continued to increase our single name portfolio diversification with name count up from 153 companies 1 year ago and 108 companies at the beginning of 2020. Our portfolio primarily consists of investments in first lien senior secured loans, given our focus on downside management and investing in the top of capital structures. As of March 31, 64% of the investment portfolio at fair value was invested in first lien debt, 1% in second lien debt, 3% subordinated debt, 7% in preferred equity, 9% in equity and 16% across our joint ventures, including…

Thank you, Mike and good morning everyone. I’ll start the review of our first quarter results with our income statement. Total investment income was $66.8 million for the 3 months ended March 31, 2025 as compared to $73.3 million for the 3 months ended December 31, 2024. The decrease in investment income was driven by decrease in average investment balance of the portfolio as a new origination funded towards the back half of the quarter, lower portfolio risk and decrease in other income. The quality of our investment income continues to be high as vast majority of our investment income is driven by contractual cash income across our investments. Interest income and dividend income represented 96% of our total investment income in Q1. PIK income is also low at just under 10% of our overall investment income. Notably, the vast majority of our PIK income is derived from investments that were underwritten with PIK versus from amendment or restructured investments. Total expenses before taxes for the first quarter was $33.7 million as compared to $38.4 million in the fourth quarter. The decrease in expenses was primarily driven by lower incentive fee resulting from our 3-year look-back feature on our incentive fee hurdle rate. Net investment income for the quarter was $32.1 million or $0.50 per share as compared to $33.6 million or $0.52 per share for the prior quarter. During the three months ended March 31, 2025, the company had net realized and unrealized losses of $3.6 million. Net income for three months ended March 31, 2025, was $28.5 million or $0.44 per share. Moving to our balance sheet, as of March 31st, our investment portfolio at fair value totaled $2.5 billion and total assets of $2.6 billion. Total net assets were $1.1 billion as of March 31st. NAV per…

Thanks Amit and thank you, Mike, as well. In closing, we are pleased to deliver a strong start to the year for our shareholders with our Q1 2025 results. Looking ahead, we believe our portfolio and balance sheet are well positioned to navigate potentially increasing periods of liquidity ahead, or volatility ahead, excuse me, and our investment team with deep expertise having invested across multiple market cycles across our line. We remain committed to delivering value for our shareholders by providing attractive returns on equity and prudently managing our shareholders’ capital. Nikkie, please open the line for questions. Thanks.

[Operator Instructions] And we will take our first question from Paul Johnson with KBW. Please go ahead. Your line is open.

Yes. Thanks for taking my questions. Just on the later fundings that you mentioned in the quarter, and the lower sort of interest income, I guess quarter-over-quarter. Is there any way to quantify that, I guess in terms of like how much funded kind of late in the quarter and kind of win approximate timing?

Sure. Thanks for the question, Paul. So, it was somewhat backdated in terms of new fundings. But what I would point you to is just the spread calculation and yield calculation across the entire portfolio. So, we are still generating about an 11.5% yield across the book and new originations. As Ewald noted in his remarks, were made at about 540 basis points spread over base rates. So, we do feel quite good that the earnings yield is still quite stable. But I do note your point that some of the fundings were back weighted into the quarter.

And Paul, look, if it’s helpful to that spread, the 540 basis points plus that we had last quarter was down about 10 basis points over the prior quarter. So, decline, but certainly not what we have seen earlier.

And that spread, is that just a straight coupon spread, or does that include any kind of adjustment for like amortized income?

It’s spread. Yes.

Got it. Okay.

I mean on an average, right our spread [Technical Difficulty]

Got it. Okay. Thank you for that. And then maybe just kind of talking about – or sorry, going into just the realized losses this quarter, can you just kind of talk about, for example, forming machine industries, what was kind of the resolution there, if that’s what drove the loss or if there was any other things in that it drove realized losses this quarter and how you are able to drive to such a quick solution there?

Sure. Yes, we did have two names that were on non-accrual that we exited in the quarter. Atlas, which is at forming machine products as well as Aimbridge, which was a second lien investment that we made. Both of them were situations where our restructuring teams worked with the company and other participants in the capital structure to drive to a resolution. And in both of those situations, we either sold the position to another lender in the group or just completely exited the position with the sale of the company. So, both of those were on – had been on accrual for quite a reasonable period of time when we were doing work through the restructuring. And in both situations, we feel like we optimized our value on the exit. In Atlas, we were both in the first lien and second lien. And in Aimbridge, we were a second lien holder there. And both of those, we did recover a reasonable value here over the life of the hold north of $0.50 across both of those investments. So, it was the strong work of our restructuring team that did drive us to exit both of those investments here in the first quarter.

Got it. And that’s in the exit mark, $0.50, the recovery there, was that below the fourth quarter mark? Was there any sort of additional markdown from that, or was that pretty much in line from last quarter?

That was in line with last quarter’s mark.

Thank you very much. That’s all for me.

Thank you.

[Operator Instructions] We will move next with Finian O’Shea with Wells Fargo Securities. Please go ahead. Your line is open. Finian O’Shea: Hey everyone. Good morning. I wanted to ask about the ATM. It looks like you tapped that in the quarter, just seeing what your posture will be there if this will sort of continue to dribble out as they say? And if so, will you also be buying back stock below book going forward? Thanks.

Thanks Ben. Look, we – it is on the ATM in first. It’s mostly [ph] opportunistic, if it makes sense to tap at a quick math issued, but as you certainly appreciate the entire segment traded down early right around the time that we announced it. So, we did not end up tapping into that again. It is something that is open, it’s available, but I think it’s dependent on how we are trading. And on your question around buybacks, we do sell the program that we put in place. I guess probably back 4 years ago now. It’s something that we evaluate versus the alternative of continuing to use that capital – equity capital to invest in the market. As you know, we haven’t tapped that before, but that is something that is available to us if we think that, that is the report [ph] of capital. Finian O’Shea: Okay. Thanks. Can you talk about dividend coverage and the SOFR curve like sort of what level? Would it be the next Fed cut or something more that would put you underneath?

I would say at this point, yes – at this point, based on our projection, right. And again, in an environment where we believe rates will continue to stay higher, we don’t see in foreseeable future that we need to revisit our current dividend. As we have highlighted, our regular dividend is $0.42, and we have been declaring additional supplemental dividend, so we don’t foresee in near-term any need for us to revisit our dividend. At the same time, as we highlighted, we do have good amount of spillover income as well, which we will continue to evaluate as we look at our dividend policy. Finian O’Shea: Okay. Thanks so much.

[Operator Instructions] And there appear to be no further questions at this time. I will turn the call back to management for closing – actually yes, we are showing another question comes from the line of Derek Hewett with Bank of America. Please go ahead.

Good morning everyone. Just a question on the look back, if the – if credit kind of stabilizes, at current levels, when should the full incentive fee kick back in? Will it be in the second quarter, or will it be some time later? Thank you.

We do expect that from second quarter onwards, it should stabilize. There are some nuances with look back because there is a payment component too. So, it does create some volatility in future as well. But we do expect that significant amount of impact around COVID and all has already been accounted for. So, we do expect from Q2, it should be more stabilized.

Okay. Thank you.

Thank you. And it appears that we have no further questions at this time. I will turn the call back to management for closing or additional remarks.

Thanks a lot, Nikkie, and thanks again to everyone on the phone for your time and attention today. We look forward to speaking with you again next quarter. Thanks.

And this does conclude today’s program. Thank you for your participation. You may disconnect at any time.