Barings BDC, Inc. (NYSE:BBDC) Q3 2023 Earnings Call Transcript

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Elizabeth Murray: It’s about $28 million.

Casey Alexander: Okay, it’s about $28 million. So, all right. That’s great. Thank you. And then, Ian, can you give us some view into security, which I understand is an MVC position, but it was marked down $10 million quarter-over-quarter. So that’s a pretty big change in that valuation. And then past that, I know you’ve got different guys who work on core. Core was marked up $6 million to 75% of par, I would be interested in hearing about the package of securities that you think you’re going to receive on core that fed into your ability to market at 75% of par.

Ian Fowler: Yes. Hey, Casey. I’m going to let Matt. Yes, I’m going to let Matt.

Matt Freund: Yes, good. Ian and I had the same thought. Good morning, Casey. Appreciate the question. And so as you may recall, the position in security holdings is equity oriented. During the course of the past quarter, there were some projects that unfortunately shifted to the right. I think that the impact of the financials is that the EBITDA trended a little bit against us as you apply an enterprise value multiple to that figure. It just magnifies the impact of the timing dynamic associated with performance. And so this is the unfortunate reality of equity positions whenever they constitute a portfolio is that they can be a little bit more volatile and we were exposed on the volatility side this particular quarter, but don’t have any reason to be concerned with respect to that position longer term and are optimistic that over an intermediate period of time we’ll see the recovery and the performance.

I’m actually going to turn the call over to Bryan to speak to core more specifically.

Bryan High: Yes, thanks, Matt. And hey, Casey. In terms of core, so from a process perspective, they’ve reached an agreement with all parties. They still have to get disclosure statements approved and solicitation needs to go out for everyone to make elections in terms of how they want to vote as it relates to the plan. As I know you know, we’ve talked about previously, there’s a couple of different options in terms of what the equipment loan holders can receive, one of which is reinstated debt of roughly $0.80 on the dollar, and the other is equity in the business on the go for it, reorganized equity. So that solicitation process has not happened yet. We still have the ability to make an election there, and we’re evaluating both of those options.

Casey Alexander: Okay, great. Thank you for taking my questions. I appreciate it.

Ian Fowler: Thank you, Casey.

Operator: Thank you. We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Eric Lloyd for any closing remarks.

Eric Lloyd: Just thank everybody for dialing in and everybody have a wonderful weekend.

Operator: Thank you. This does conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

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