On August 8, 2024, Goldman Sachs BDC Inc (GSBD, Financial) released its 8-K filing reporting financial results for the second quarter ended June 30, 2024. Goldman Sachs BDC Inc is a non-diversified, closed-end management investment company focused on lending to middle-market companies. The company aims to generate current income and capital appreciation primarily through direct originations of secured debt and other investments.
Performance Overview
Goldman Sachs BDC Inc reported total investment income of $108.6 million for Q2 2024, slightly below the analyst estimate of $112.92 million. However, the company exceeded earnings per share (EPS) expectations, reporting $0.59 per share compared to the estimated $0.53 per share. The decrease in total investment income from $111.5 million in Q1 2024 was primarily due to investments being placed on non-accrual status as a result of underperformance during the quarter.
Financial Achievements and Challenges
Despite the challenges, Goldman Sachs BDC Inc achieved a net investment income after taxes of $67.0 million, up from $60.8 million in the previous quarter. The company also declared a quarterly dividend of $0.45 per share. However, net realized and unrealized losses amounted to $121.4 million, significantly higher than the $18.4 million loss in Q1 2024. This increase in losses was primarily due to realized and unrealized depreciation from the purchase discount.
Investment Activity and Portfolio Summary
During Q2 2024, Goldman Sachs BDC Inc made new investment commitments totaling $440.0 million, primarily in first lien/senior secured debt. Sales and repayments amounted to $226.5 million, driven by the full repayment and restructuring of investments in six portfolio companies. As of June 30, 2024, the company's investment portfolio at fair value was $3,518.7 million, with first lien/senior secured debt accounting for 92.3% of the total portfolio.
| Investment Type | Fair Value ($ Millions) | % of Total |
|---|---|---|
| 1st Lien/Senior Secured Debt | 3,245.9 | 92.3% |
| 1st Lien/Last-Out Unitranche | 160.6 | 4.6% |
| 2nd Lien/Senior Secured Debt | 40.2 | 1.1% |
| Unsecured Debt | 8.7 | 0.2% |
| Preferred Stock | 38.5 | 1.1% |
| Common Stock | 24.5 | 0.7% |
| Warrants | 0.3 | 0.0% |
Liquidity and Capital Resources
As of June 30, 2024, Goldman Sachs BDC Inc had $1,955.1 million in total debt outstanding, with a combined weighted average interest rate of 5.35%. The company had $1,000.2 million available under its revolving credit facility and $61.6 million in cash. The ending net debt-to-equity leverage ratio was 1.19x, up from 1.10x in the previous quarter.
Conclusion
Goldman Sachs BDC Inc's Q2 2024 earnings report highlights both achievements and challenges. While the company missed revenue estimates, it exceeded EPS expectations and maintained a strong investment portfolio. The increase in net investment income and the declaration of a quarterly dividend are positive indicators for investors. However, the significant net realized and unrealized losses underscore the challenges faced by the company in the current market environment.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Goldman Sachs BDC Inc for further details.
