Good afternoon. Welcome to the Golub Capital BDC Incorporated March 31, 2014 Quarterly Earnings Conference Call. Before we begin, I’d like to take a moment to remind our listeners that remarks made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts made during this call may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time-to-time in Golub Capital BDC Incorporated’s filings with the Securities and Exchange Commission. For a slide presentation that we intend to refer to on the earnings conference call, please visit the Events and Presentations link on the homepage of our website, www.golubcapitalbdc.com and click on the Investor Presentation’s link to find the March 31, 2014 investor presentation. Golub Capital BDC’s earnings release is also available on the company’s website in the Investor Relations section. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to David Golub, Chief Executive Officer of Golub Capital BDC.

Thanks, operator. And good afternoon to everybody, thanks for joining us today. I’m joined today by Ross Teune, our Chief Financial Officer; and Gregory Robbins, Managing Director here at Golub Capital. Earlier today we issued our quarterly earnings press release for the quarter ended March 31st and we posted a supplemental earnings presentation on our website. We are going to be referring to the presentation through the call today. I want to start by providing an overview of the results for the March 31, 2014 quarter, Ross is then going to take you through the results in more detail and I’ll come back and provide an update on our outlook at the end and take some questions. With that let’s get started. I’m pleased to report we had another strong quarter of great steady financial results. In addition to the steadiness and consistency of the earnings for the quarter the financial themes in this quarter’s results are very much consistent with the themes that we have talked to you about over the last couple of quarters. And I want to highlight three of those themes particularly at the outset. First we continue to see some spread compression in the first calendar quarter of 2014, but we have seen some signs recently of stabilizing rates. Second we continue to view the market for junior debt as very competitive and very challenging and given this and given our cautious macroeconomic outlook, we continue to focus on originating high quality senior secured and one stop investments and not to be particularly focused on junior debt. And third, overall the credit quality of GBDC’s portfolio remains very strong and we will give you some statistics backing that up. So with that context let’s run through the numbers and we’ll start on page two of…

Great, thanks David. Flipping to slide 5 the balance sheet, we ended the quarter with total investments of $1.25 billion, the total cash and restricted cash of $54.1 million and total assets of just over $1.3 billion. Our total debt was $572 million; this consists of $215 million of floating rate debt issued through our securitization vehicle. We had approximately of $202 million of fixed rate debentures issued through our SBIC entities and $155 million of debt outstanding in our revolving credit facilities. Total net assets at the end of the quarter were $721.9 million and this is up about $62 million from the previous quarter primarily due to the equity offering that we completed back in March. As David mentioned, from a GAAP perspective, our debt to equity ratio was 0.82 times and calculated for our regulatory limit our debt to equity ratio was 0.54 times. Flipping to the next slide, the statement of operations, total investment income for the quarter ended March 31 was $25.3 million. This was a decrease of about $300,000 from the prior quarter. The decline in investment income was due to $1.1 million decrease in prepayment fees and this was partially offset by an increase in interest and dividend income of about $800,000. On the expense side, total expenses of $11.9 million decreased by about $400,000 during the quarter as we had $1.4 million decrease in incentive fee expense which was partially offset by higher interest expense and higher base management fees. As David mentioned earlier, we had net realized gain on investments of $0.7 million during the quarter primarily due to unrealized appreciation on a range of middle market debt and equity investments. And finally net income for the quarter ended March 31 totaled $14.1 million. Turning to slide 7 these charts graphically…

Thanks Ross. So since our last quarterly call not much has changed in terms of our macroeconomic outlook. We continue to see in our portfolio company's results generally slight improvements in profits. Although we are seeing some exceptions in calendar Q1 due to a weather and consumer reluctant [dispend]. I would say overall we don't see signs of an imminent downturn, but likewise we remained quite cautious about the medium term outlook. Because we see many potential negative catalysts and not many, in fact very few potential positive ones. So our approach in this environment has been and remains consistent. We are going to continue to be highly selective and we're going to continue to focus on senior secured and one-stop investments in resilient, recession resistance borrowers and partnership with responsible relationship oriented private equity sponsors. We hope to continue to see the fruits of this strategy and the kinds of strong credit results and steady earnings that we talked about today. So that's concludes our prepared remarks. And as always I want to thank everyone on the phone for your time and your continued support. And operator we'll open the floor for questions.

Thank you. (Operator Instructions). Our first question comes from the line of Greg Mason with KBW. Please proceed with your question.

Great, thanks guys. I appreciate you taking my question. David, as I look on slide 8, the overall portfolio yields and slide 9, the new yields you are putting on, I guess my question is why raise capital and grow in an environment that's clearly at least competitive from an asset yield standpoint? Just can you give us a view on is it better to just hold the line steady here versus continuing to grow?

I think it's a great question. The question of when is it in investors’ interest for GBDC to grow, it's one we think a lot about. In the March quarter, we determined that it made sense to do an equity offering and to take some additional capital in, in substantial part, because we saw an opportunity to raise that capital at a price level that was accretive for shareholders. And I think if we had not seen the opportunity to raise additional capital at a value that was accretive for shareholders, your question would have been difficult to get DSI. So, we're very focused right now on using our existing capital base in order to produce an attractive ROE for our investors, we're very focused on improving our NAV over time and we’re very focused on not taking too much risk. And all of those things argue I think in this environment for definitely for slow growth and potentially for a period without growth.

I appreciate those comments. And as we evaluate what is potentially accretive for shareholders at --when you raised an 18 that was at 1.18 of book value and a 7% dividend yield with the stock today still above book value but only at 107 today and 7.9% yield. Where the stock is at now, does that change your calculation for if it would be accretive today, just thinking about going forward for future issue?

I think the statistics you just highlighted are central to a discussion that we would have with our Board about what the right answer is. I can’t tell you with specificity we would raise at such and such a price and we wouldn’t raise at a penny less; that’s not I think a useful exercise because we’re really not looking at raising additional capital right now. It’ll be a potential conversation at some point in the future. So, I think the more useful thing I can say is exactly the considerations you’re describing, what’s going to happen to book value post an offering, what’s going to happen to EPS per share post an offering, what’s going to happen to the quality of the portfolio post an offering, those are critical questions that we’re very focused on.

Great. Thanks David.

(Operator Instructions). Our next question will come from the line of [Robert Don] with Raymond James. Please proceed with your question.

Hi guys. Just so on the yield and the market, your commentary at the beginning indicates that you’re seeing some recent stability in the yields. Can you give us a bit more color on that? I mean obviously we’ve heard that from some other sources this quarter relatively recently and whether that ties to yields only -- coupons only, or fees or leverage levels that you are seeing in deals at this point? Any more color there would be appreciated.

Sure. I’ve said many times before that in middle market lending, we are insulated from but not immune to trends in broader credit markets. So, let me start by talking about broader credit markets because these are influential in what we are seeing in our market. And in particular the broader credit market I want to talk about is that the broadly syndicated loan market. This is the loan market dominated by JP Morgan and Bank of America and other large banks. What we are seeing that market is a very clear change in retail inflows. And retail inflows have been very strong and have been driving that market toward a very borrower friendly terms for many, many months in a row. So in the first quarter of this quarter, we have seen a change in that and then several of the months actually reversal, some outflows. And we have seen general trend in the broadly syndicated loan market toward stabilizing or even a higher spreads on new transactions that are coming out. Generally speaking, what I anticipate is that as a pattern is that when we see this kind of movement in the probably syndicated market, we can expect to see similar a phenomenon in the middle market often with a little bit of lag. And that’s what I think we are seeing right now. So we are seeing stabilization in spreads, we are seeing a stabilization in leverage levels, and I think that trend is likely to continue. I think we have a number of sources of tailwind on that trend. One of the major sources of tailwind on that trend is what we are hearing and perceiving to be an increasing level of discussion between regulators and banks about the regulators’ desire to see banks abiding by the regulatory guidance with respect to leverage loans. So I am cautiously optimistic that we’re either at or close to the end of the cycle of spread compression. But as Ross indicate, there is still a trend in our portfolio which is our new investment yields or a bit lower than the existing investments that are being sold or paid off, mostly paid off. And so we -- while I anticipate an easing of spread compression, I don’t want to make it sound like it’s over from the standpoint of our portfolio on our financial results. I think we’ve got and others do too, we’ve got a few more quarters to go of seeing some incremental decrease in weighted average yields in the portfolio.

Okay. That is helpful, very helpful color. Can you give us a bit of discussions on why the decision this quarter for example to do so much of these new lower yield unit tranche deals on balance sheet rather than through the SLS where you can frankly get higher returns for the capital on the equity, the shareholders’ equity you are putting in?

It’s actually not a decision per se. the senior loan fund has its stated strategy investing in traditional middle market senior loans and not in one stops. So SLS this quarter did not participate in our one stop loans, but that's not a new decision, that's part of our strategy with respect to SLS. SLS kind of focus on traditional middle market senior debt.

Okay. Thank you.

Our next question will come from the line of Jon Bock with Wells Fargo Securities. Please proceed with your question.

Hi. Good afternoon and thank you for taking my question. David, as we see lower yields going to balance sheet, we understand that you're protecting the portfolio particularly in the event of credit issues et cetera. But there is a slight offers, just to make sure you could give us some clarity around. Can you walk us through the impact of putting these lower rates on the balance sheet, but then falling below the hurdle rate and what that does to or what that should likely do to NOI in the near future from a downside perspective?

Yes, I mean you can -- this is a great question. Jon's pointing out phenomenon and I'll describe it slightly differently and let’s look to the income statement together, so we can actually see this in operation. It's a page 6, if you look at the March 31, 2014 column versus the December 31, 2013, column and look at the row called incentive fee and you'll see that it's fell from 3 million in the December quarter to 1.65 million in the March quarter. So why is that happening? It's happening because net investment income falls right now in the catch-up zone. And so the manager is absorbing the reduction in profitability in order to sustain appropriate income level at our preferred return level for shareholders. And that's the deal that we as manager have with our shareholders, I think it's a fair and appropriate deal. One of the ramifications of this is that the decision to go quality here is substantially coming out of the manager’s pocket. And another ramification of this is that, if especially to compress a little bit more, it would continue to come out of the manager's pocket without a comment in decrease in net investment income per share or earnings per share. So, in a way we're very much putting our money where our mouth is here and putting forward a quality first strategy. And I think it's important for everybody to understand that it's very much a thoughtful decision on our part. But it's a consequential one from the standpoint of manager compensation.

Appreciate the color. And then turning to the SLF, I understand that it's focused for traditional middle market senior loans. When I do look in the portfolio though, it seems that there was a little bit of activity in names, maybe that I wouldn't classify necessarily as middle market, let's say DAL, et cetera, systems, BMC and a few others. Could we take that to mean that there is a certain amount of liquid senior loan collateral you would be willing to contribute to the SLF, still earn good returns and maybe benefit from other areas of your platform that are adapted at managing those types of senior loan collateral and maybe we should look for a bit more sustained growth in that entity going forward?

Again, thanks Jon for raising that. I appreciate it, because your point is dead right. So we have struggled with the question with respect to senior loan fund of how to increase the piece of growth of senior fund in order to be able to get the level of leverage on the portfolio that we want in order in turn to get the level of equity return that we’re seeking. And one of the strategies that we’ve decided to undertake in partnership with our partner on SLF is to put some select larger loans into the portfolio. We’re going to continually evaluate whether we want to increase or decrease the portion of that portfolio that is in larger loans. But right now it is our judgment that with the cost of borrowing that we’ve got and availability of attractive secondary market larger loans that we can sell later if we decide we want to, but it makes sense to purchase some of those loans into SLF and accelerate the ramp. And one of the discussions that we are undertaking right now is whether to do more of that or whether to just continue to be patient with the slower ramp of traditional middle-market senior loans in SLF.

Got it. And then we all seem to be again very focused on yields where we see compression from one stops that went from 8.7, 8.2. Maybe getting to more of the risk adjusted yield, could you give us a sense of the leverage levels into our kind of we’ll call it risk quality assessments of those types of one stops and how they’ve compared to a few of the transactions that you’ve done maybe in years past to get a sense of the risk adjusted return today as it stands in those new loans that you’re putting on the books?

I mentioned earlier in this call we did see, have seen a pattern of some reduction in spreads. I don’t think and we can go back and check some numbers and come back to you. But I don’t think there is data supporting the hypothesis that we’ve seen, we’ve seen meaningful leverage creep in recent quarters. I think we and others are holding the line with respect to the levels of leverage that we are prepared to accept in one stop loans. So I think from a quality standpoint these are very strong, very solid companies and from a structural standpoint, I think these are not -- what we are not stretching.

And then maybe just a blockbuster to your say earliest attachment point is what today and that goes all the way for your last attachment point of what just speaking more broadly about these types of transactions, you are looking at?

It’s a hard question to answer because credits are idiosyncratic, so there is no one answer to your question. But I would say in general we are looking at one stop loans for our starting attachment line to zero with the first dollar of debt and our ending attachment point would typically be in the fives.

Okay. All right, thank you very much.

And at the present time, there are no further questions from the phone lines.

Great. Well again, I just want to thank everybody for their time today. And as always offer the opportunity to anyone on the phone to call Ross or myself if you have further questions. Thanks everybody.

Ladies and gentlemen that does conclude the conference call for today. We thank you for your participation. I say you please disconnect your lines. Have a great day everyone.