Bain Capital Specialty Finance, Inc (NYSE:BCSF) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 08:30 am ET

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Bain Capital Specialty Finance, Inc (NYSE:BCSF) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings. Welcome to the Bain Capital Specialty Finance Third Quarter 2019 Earnings Conference Call. [Operator Instructions]

I will now turn the conference over to your host Sloan Bohlen Investor Relations. You may begin.

Executive
Sloan Bolen

Good morning. Last night we issued our third quarter 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 unauthorized broadcast in any form is strictly prohibited.

Any forward-looking statements we make 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 annual report and Form 10-K 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.

And with that I'd like to turn the call over to our President and Chief Executive Officer Michael Ewald.

Executive
Michael A. Ewald

Good morning, and thank you for joining us for our third quarter 2019 earnings call. As Sloan mentioned, my name is Michael Ewald, and I'm joined today by our Vice President and Treasurer, Mike Boyle; and our Chief Financial Officer, Sally Dornaus. I'm going to start with a brief snapshot of the portfolio, and we'll provide some high-level comments on our strategy in the market. Then both Mike and Sally will give some additional detail on the investment book and our results.

At the end of the third quarter, the BCSF portfolio represented $2.5 billion invested across 30 different industries and 126 portfolio companies, with a current weighted average yield of 7.7%. In the quarter, we originated $275 million of new investments and had sales or repayments of $184 million. Excluding the impact of the ABCS balance sheet consolidation in the second quarter, our new originations year-to-date totaled $953 million against sales or repayments of $755 million. As for the makeup of the portfolio, it's relatively unchanged by loan type and industry exposure.

At quarter end, approximately 88% of our portfolio is invested in first dollar risk, and is made up of traditional first-lien loans and unitranches. Credit in the portfolio is still very strong, and there remain zero non-accruals. We are again pleased to announce that our Board declared a fourth quarter dividend of $0.41 per share. The quarterly dividend will be payable on January 30, 2020, to stockholders of record on December 31, 2019. Overall, we remain cautious with regard to credit and believe the portfolio is well positioned for a weakening economy if that eventually occurs. Our portfolio remains overweight in resilient sectors like technology and health