8-K
Kayne Anderson BDC, Inc. (KBDC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the SecuritiesExchange Act of 1934
Date of Report (Date of earliest event reported):
August 13, 2024
Kayne Anderson BDC, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 814-01363 | 83-0531326 |
|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission File Number) | (IRS Employer<br><br>Identification No.) |
| 717 Texas Avenue, Suite 2200, Houston, TX | 77002 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code:
1 (713) 493-2020
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.001 | KBDC | NYSE |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On August 13, 2024, Kayne Anderson BDC, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2024. The text of the press release is included as Exhibit 99.1 to this Form 8-K.
On August 14, 2024, the Company will host a conference call to discuss its financial results for the second quarter ended June 30, 2024. In connection therewith, the Company provided an earnings presentation on its website at https://www.kaynebdc.com. A copy of the earnings presentation is attached hereto as Exhibit 99.2 to this Form 8-K.
The information disclosed under this Item 2.02, including Exhibit 99.1 and Exhibit 99.2 hereto, is being “furnished” and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 7.01. Regulation FD Disclosure.
On August 13, 2024, the Company issued a press release, included herewith as Exhibit 99.1, announcing the declaration of a third quarter 2024 dividend of $0.40 per share, which will be payable on October 15, 2024 to stockholders of record as of September 30, 2024.
The information disclosed under this Item 7.01, including Exhibit 99.1 hereto, is being “furnished” and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| ExhibitNumber | Description |
|---|---|
| 99.1 | Press Release of Kayne Anderson BDC, Inc., dated August 13, 2024. |
| 99.2 | Kayne Anderson BDC, Inc. Second Quarter 2024 Earnings Presentation. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| KAYNE ANDERSON BDC, INC. | ||
|---|---|---|
| Date: August 13, 2024 | By: | /s/ Terry A. Hart |
| Name: | Terry A. Hart | |
| Title: | Chief Financial Officer and Treasurer |
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Exhibit 99.1
Kayne Anderson BDC, Inc. Announces June 30, 2024 Financial Results and Declares Third Quarter 2024 Dividend of $0.40 Per Share
Company Release - August 13, 2024
CHICAGO--(BUSINESS WIRE)-- Kayne Anderson BDC, Inc. (NYSE: KBDC) (“KBDC or the Company”), a business development company externally managed by its investment adviser, KA Credit Advisors, LLC, today announced its financial results for the second quarter ended June 30, 2024.
“We believe that the core middle market represents the most attractive risk / reward area of private credit and are pleased with the portfolio of senior secured first lien loans that we have constructed for KBDC,” said Ken Leonard, Co-Chief Executive Officer. “Our middle market loans have relatively low leverage and higher interest coverage while earning an attractive yield for our shareholders.”
“We are encouraged by the increase in origination activity that we have experienced in the first half of the year and are confident that KBDC will continue to grow its private credit portfolio over the remainder of the year to the benefit of our shareholders,” said Doug Goodwillie, Co-Chief Executive Officer.
Financial Highlights for the Quarter Ended June 30, 2024
| ● | Net investment income of $34.4 million, or $0.51 per share; |
|---|---|
| ● | Net asset value of $16.57 per share, a decrease from $16.63 per share as of March 31, 2024, but an increase<br>of $0.05 after considering $0.11 per share dilution from the Company’s Initial Public Offering (“IPO”); |
| --- | --- |
| ● | Amended the Revolving Funding Facility, increasing the commitment from $455 million to $600 million,<br>extending the maturity date to April 3, 2029 and reducing the interest rate from daily SOFR plus 2.75% to SOFR plus 2.375%-2.50% depending<br>on the mix of loans securing the facility; |
| --- | --- |
| ● | New private credit investment commitments of $141.8 million, fundings of $136.2 million and sales and<br>repayments of $40.5 million, resulting in a net funded private credit portfolio increase of $95.7 million; |
| --- | --- |
| ● | Net repayments of broadly syndicated loans of $28.5 million; and |
| --- | --- |
| ● | The Company’s Board of Directors (the “Board”) declared a regular dividend of $0.40<br>per share, to be paid on October 15, 2024 to stockholders of record as of September 30, 2024. |
| --- | --- |
Selected Financial Highlights
| As of | ||||||
|---|---|---|---|---|---|---|
| (in thousands, expect per share data) | June 30, 2024 | March 31, 2024 | ||||
| Investment portfolio, at fair value | $ | 1,847,058 | $ | 1,784,045 | ||
| Total assets | $ | 1,909,850 | $ | 1,844,441 | ||
| Total debt outstanding, at principal | $ | 622,000 | $ | 659,000 | ||
| Net assets | $ | 1,178,176 | $ | 811,557 | ||
| Net asset value per share | $ | 16.57 | $ | 16.63 | ||
| Total debt-to-equity ratio | 0.53 | x | 0.81 | x | ||
| For the quarter ended | ||||||
| --- | --- | --- | --- | --- | --- | |
| June 30, 2024 | March 31, 2024 | |||||
| Net investment income per share | $ | 0.51 | $ | 0.52 | ||
| Net realized and unrealized gains (losses) per share | $ | (0.05 | ) | $ | 0.09 | |
| Earnings per share | $ | 0.46 | $ | 0.61 | ||
| Regular dividend per share | $ | 0.40 | $ | 0.40 | ||
| Special dividend per share | $ | - | $ | - |
Results of Operations
Total investment income for the quarter ended June 30, 2024 was $52.5 million, as compared to $46.5 million for the quarter ended March 31, 2024. The increase was driven by the additions to the portfolio during the second quarter and the full quarter impact of purchases made late in the first quarter.
Net investment income for the quarter ending June 30, 2024 was $34.4 million or $0.51 per share, compared to $23.8 million or $0.52 per share for the quarter ended March 31, 2024. Total expenses for the second quarter were $18.1 million compared to $22.7 million for the prior quarter. The decrease was due to lower interest expense resulting from using a portion of the proceeds from the Company’s IPO to repay revolver borrowings during the quarter. The decrease was also a result of a full waiver of income-based incentive fees during the quarter.
For the quarter ended June 30, 2024, the net change in unrealized losses was $3.1 million. The unrealized losses for the quarter were primarily driven by changes in the fair value of certain investments, particularly Trademark Global and Siegel Egg. Trademark Global was moved to non-accrual status as of June 30, 2024. For the quarter, realized losses were $0.1 million related to the disposition of a broadly syndicated loan position.
Portfolio and Investment Activity
| As of | ||||||
|---|---|---|---|---|---|---|
| ($ in thousands) | June 30,<br><br>2024 | March 31,<br><br>2024 | ||||
| Investments at fair value | $ | 1,847,058 | $ | 1,784,045 | ||
| Number of portfolio companies | 106 | 103 | ||||
| Average portfolio company investment size | $ | 17,425 | $ | 17,321 | ||
| Asset class: | ||||||
| First lien debt | 97.8 | % | 97.7 | % | ||
| Subordinated debt | 1.2 | % | 1.2 | % | ||
| Equity | 1.0 | % | 1.1 | % | ||
| Non-accrual debt investments: | ||||||
| Non-accrual investments at fair value | $ | 18,897 | $ | 7,033 | ||
| Non-accrual investments as a percentage of debt investments at fair value | 1.0 | % | 0.4 | % | ||
| Number of investments on non-accrual | 2 | 1 | ||||
| Interest rate type: | ||||||
| Percentage floating-rate | 100.0 | % | 100.0 | % | ||
| Percentage fixed-rate | 0.0 | % | 0.0 | % | ||
| Yields (at fair value): | ||||||
| Weighted average yield on private middle market loans | 12.3 | % | 12.4 | % | ||
| Weighted average yield on broadly syndicated loans | 8.3 | % | 8.4 | % | ||
| Weighted average yield on total debt portfolio | 11.7 | % | 11.7 | % | ||
| Investment activity during the quarter ended: | ||||||
| Gross new investment commitments | $ | 171,836 | ^(1)^ | $ | 463,753 | ^(2)^ |
| Principal amount of investments funded | $ | 166,161 | ^(1)^ | $ | 449,601 | ^(2)^ |
| Principal amount of investments sold or repaid | $ | (98,968 | )^(1)^ | $ | (32,381 | )^(2)^ |
| Net principal amount of investments funded | $ | 67,193 | $ | 417,220 | ||
| (1) | For the quarter ending June 30, 2024, broadly syndicated loans<br>represent $30,000 of new investment commitments, $30,000 of investments funded and $58,500 of investments sold or repaid. | |||||
| --- | --- | |||||
| (2) | For the quarter ending March 31, 2024, broadly syndicated loans<br>represent $302,000 of new investment commitments, $302,000 of investments funded and zero investments sold or repaid. | |||||
| --- | --- |
2
Liquidity and Capital Resources
As of June 30, 2024, the Company had $75 million senior unsecured notes outstanding, $547 million borrowed under its credit facilities and cash and cash equivalents of $40.6 million (including short-term investments). As of that date, the Company had $603 million of undrawn commitments available on its credit facilities (subject to borrowing base restrictions and other conditions).
On April 3, 2024, the Company, and its wholly owned, special purpose financing subsidiary, Kayne Anderson BDC Financing, LLC, amended the senior secured revolving funding facility (the “Revolving Funding Facility”). Under the terms of the third amendment, the commitment amount was increased from $455 million to $600 million. The end of the reinvestment period was extended to April 2, 2027 and the maturity date was extended to April 3, 2029. The interest rate on the Revolving Funding Facility was reduced from daily SOFR plus 2.75% per annum to SOFR plus 2.375% - 2.50% per annum depending on the mix of loans securing the Revolving Funding Facility.
The Company received net cash proceeds of $92.4 million upon the completion of its IPO on May 24, 2024, and received net cash proceeds of $269.9 million on April 2, 2024 when it closed its final capital call with pre-IPO shareholders.
As of June 30, 2024, the Company’s debt-to-equity ratio was 0.53x and its asset coverage ratio was 289%. The Company targets a debt-to-equity ratio of 1.0x to 1.25x (which equates to asset coverage of 200% to 180%). The Company is currently below its target but expects to continue to grow its private credit portfolio over coming quarters to achieve its targeted leverage.
Recent Developments
| ● | On August 7, 2024, the Board of Directors of the Company declared<br>a regular dividend to common stockholders in the amount of $0.40 per share. The dividend will be paid on October 15, 2024 to stockholders<br>of record as of the close of business on September 30, 2024. |
|---|
Conference Call Information
KBDC will host a conference call at 10:00 am ET on Wednesday, August 14, 2024, to review its financial results. All interested parties are invited to participate using the following telephone dial-in or the webcast details:
Telephone Dial-in
| ● | Domestic: 800-579-2543 |
|---|---|
| ● | International: +1 785-424-1789 |
| --- | --- |
| ● | Conference ID: KBDC2Q |
| --- | --- |
Webcast Link
| ● | https://events.q4inc.com/attendee/528656183 |
|---|
To avoid potential delays, please join at least 10 minutes prior to the start of the earnings call. A telephone replay will also be available by dialing 800-934-7612 (domestic) and +1 402-220-6980 (international). The replay will be available until August 28, 2024.
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Kayne Anderson BDC, Inc.
Consolidated Statements of Assets and Liabilities
(amounts in 000’s, except share and per share amounts)
| December 31,<br><br>2023 | |||||
|---|---|---|---|---|---|
| Assets: | |||||
| Investments, at fair value: | |||||
| Long-term investments (amortized cost of 1,825,906 and 1,343,223) | 1,847,058 | $ | 1,363,498 | ||
| Short-term investments (amortized cost of 20,344 and 12,802) | 20,344 | 12,802 | |||
| Cash and cash equivalents | 20,271 | 34,069 | |||
| Receivable for principal payments on investments | 5,280 | 104 | |||
| Interest receivable | 16,780 | 12,874 | |||
| Prepaid expenses and other assets | 117 | 319 | |||
| Total Assets | 1,909,850 | $ | 1,423,666 | ||
| Liabilities: | |||||
| Corporate Credit Facility | 75,000 | $ | 234,000 | ||
| Unamortized Corporate Credit Facility issuance costs | (1,321 | ) | (1,715 | ) | |
| Revolving Funding Facility | 389,000 | 306,000 | |||
| Unamortized Revolving Funding Facility issuance costs | (5,808 | ) | (2,019 | ) | |
| Revolving Funding Facility II | 83,000 | 70,000 | |||
| Unamortized Revolving Funding Facility II issuance costs | (1,571 | ) | (1,805 | ) | |
| Subscription Credit Agreement | - | 10,750 | |||
| Unamortized Subscription Credit Facility issuance costs | - | (41 | ) | ||
| Notes | 75,000 | 75,000 | |||
| Unamortized notes issuance costs | (748 | ) | (851 | ) | |
| Payable for investments purchased | 72,322 | - | |||
| Distributions payable | 28,446 | 22,050 | |||
| Management fee payable | 3,780 | 2,996 | |||
| Incentive fee payable | - | 14,195 | |||
| Accrued expenses and other liabilities | 14,574 | 11,949 | |||
| Accrued excise tax expense | - | 101 | |||
| Total Liabilities | 731,674 | $ | 740,610 | ||
| Commitments and contingencies | |||||
| Net Assets: | |||||
| Common Shares, 0.001 par value; 100,000,000 shares authorized; 71,116,459 and 41,603,666 as of June 30, 2024 and December 31, 2023, respectively, issued and outstanding | 71 | $ | 42 | ||
| Additional paid-in capital | 1,154,108 | 669,990 | |||
| Total distributable earnings (deficit) | 23,997 | 13,024 | |||
| Total Net Assets | 1,178,176 | $ | 683,056 | ||
| Total Liabilities and Net Assets | 1,909,850 | $ | 1,423,666 | ||
| Net Asset Value Per Common Share | 16.57 | $ | 16.42 |
All values are in US Dollars.
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Kayne Anderson BDC, Inc.
Consolidated Statements of Operations
(amounts in 000’s, except share and per share amounts)
(Unaudited)
| For the three months ended | For the six months ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30,<br><br>2024 | June 30,<br><br>2023 | June 30,<br><br>2024 | June 30,<br><br>2023 | |||||||||
| Income: | ||||||||||||
| Investment income from investments: | ||||||||||||
| Interest income | $ | 51,991 | $ | 40,746 | $ | 98,228 | $ | 77,112 | ||||
| Dividend income | 462 | - | 719 | - | ||||||||
| Total Investment Income | 52,453 | 40,746 | 98,947 | 77,112 | ||||||||
| Expenses: | ||||||||||||
| Management fees | 4,251 | 2,848 | 7,773 | 5,533 | ||||||||
| Incentive fees | 4,109 | 2,420 | 6,740 | 4,558 | ||||||||
| Interest expense | 13,239 | 13,002 | 28,895 | 24,525 | ||||||||
| Professional fees | 375 | 143 | 639 | 293 | ||||||||
| Directors fees | 158 | 178 | 305 | 317 | ||||||||
| Other general and administrative expenses | 508 | 422 | 979 | 871 | ||||||||
| Total Expenses | 22,640 | 19,013 | 45,331 | 36,097 | ||||||||
| Less: Management fee waiver | (471 | ) | - | (471 | ) | - | ||||||
| Less: Incentive fee waiver | (4,109 | ) | - | (4,109 | ) | - | ||||||
| Net Expenses | 18,060 | 19,013 | 40,751 | 36,097 | ||||||||
| Net Investment Income (Loss) | 34,393 | 21,733 | 58,196 | 41,015 | ||||||||
| Realized and unrealized gains (losses) on investments | ||||||||||||
| Net realized gains (losses): | ||||||||||||
| Investments | (138 | ) | - | (138 | ) | - | ||||||
| Total net realized gains (losses) | (138 | ) | - | (138 | ) | - | ||||||
| Net change in unrealized gains (losses): | ||||||||||||
| Investments | (3,075 | ) | (731 | ) | 877 | (606 | ) | |||||
| Total net change in unrealized gains (losses) | (3,075 | ) | (731 | ) | 877 | (606 | ) | |||||
| Total realized and unrealized gains (losses) | (3,213 | ) | (731 | ) | 739 | (606 | ) | |||||
| Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 31,180 | $ | 21,002 | $ | 58,935 | $ | 40,409 | ||||
| Per Common Share Data: | ||||||||||||
| Basic and diluted net investment income per common share | $ | 0.51 | $ | 0.56 | $ | 1.03 | $ | 1.10 | ||||
| Basic and diluted net increase in net assets resulting from operations | $ | 0.46 | $ | 0.54 | $ | 1.05 | $ | 1.08 | ||||
| Weighted Average Common Shares Outstanding - Basic and Diluted | 67,426,904 | 38,905,173 | 56,386,161 | 37,425,525 |
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About Kayne Anderson BDC, Inc.
Kayne Anderson BDC, Inc. is a business development company (“BDC”) that invests primarily in first lien senior secured loans, with a secondary focus on unitranche and split-lien loans to middle market companies. KBDC is externally managed by its investment adviser, KA Credit Advisors, LLC, an indirect controlled subsidiary of Kayne Anderson Capital Advisors, L.P., a prominent alternative investment management firm. KBDC has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (“1940 Act”). KBDC’s investment objective is to generate current income and, to a lesser extent, capital appreciation. For more information, please visit www.kaynebdc.com.
Forward-looking Statements
This press release may contain “forward-looking statements” that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about KBDC, its current and prospective portfolio investments, its industry, its beliefs and opinions, and its assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond KBDC’s control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation, the risks, uncertainties and other factors identified in KBDC’s filings with the SEC. All forward-looking statements speak only as of the date of this press release. KBDC does not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law.
Contacts:
Investor Relations
kaynebdc@kaynecapital.com
6
Exhibit 99.2
KAYNEBDC.COM KAYNE ANDERSON BDC , INC. EARNINGS PRESENTATION Second Quarter 2024
2 Disclaimer and Forward - Looking Statement This presentation may contain “forward - looking statements” that involve substantial risks and uncertainties . Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon . These forward - looking statements are not historical facts, but rather are based on current expectations, estimates and projections about Kayne Anderson BDC , Inc . (“ KBDC ”), its current and prospective portfolio investments, its industry, its beliefs and opinions, and its assumptions . Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward - looking statements . These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond KBDC’s control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward - looking statements including, without limitation, the risks, uncertainties and other factors identified in KBDC’s filings with the SEC . All forward - looking statements speak only as of the date of this presentation . KBDC does not undertake any obligation to update or revise any forward - looking statements or any other information contained herein, except as required by applicable law .
EXECUTIVE SUMMARY
4 Executive Summary Quarterly Highlights 1 Annualized dividend yield is calculated by dividing the declared dividend per share by the net asset value per share at the e nd of the quarter and annualizing such amount over four quarterly periods. There can be no assurance that the same dividend yield will be achieved. 2 Actual yields earned over the life of investments could be materially different from the yields presented herein. 3 Excludes investments in broadly syndicated loans; as of June 30, 2024, KBDC held $273 million of such investments (fair value), repres en ting ~15% of total fair market value of investments. 4 Excludes investments on watchlist. 5 Calculated as a percentage of total debt investments at fair value. Financial Results Portfolio Debt & Liquidity Recent Events » Net investment income per share: $0.51 » Net asset value per share: $16.57 » Annualized ROE: 12.3% on net investment income » 2Q’24 dividend per share: $0.40 regular (annualized dividend yield of ~9.7%) (1) » Total fair value was approximately $1.85 billion invested in 106 companies » Weighted average yield at amortized cost of debt investments was 11.8% (2) » 98% first - lien portfolio » Weighted average and median EBITDA of borrowers of $58.9 million (3)(4) and $34.2 million (3)(4) , respectively » Average position size of 0.9% with 10 largest positions representing 19.0% of the portfolio (5) » 1.0% of investments (based on fair value) on non - accrual » Outstanding debt balance was $662 million; quarter - end debt - to - equity ratio was 0.53x » Total liquidity of $644 million, including cash of $41 million and undrawn committed debt capacity of $603 million » Declared 3Q regular distribution of $0.40 per share on August 7, 2024 » Declared three special distributions on May 8, 2024, of $0.10 per share payable on December 20, 2024, March 18, 2025 and June 24, 2025
5 Executive Summary Investment Highlights » Lending philosophy focused on core middle market in defensive, stable industries » Experienced, long - tenured leadership and investment team » High - quality sourcing and execution model with high degree of selectivity » Diversified, conservative portfolio with focus on senior secured, first lien loans » Active portfolio management and risk monitoring » Focus on shareholder alignment
6 » Scaled, differentiated BDC via focus on core middle market ($10 - $50+ million of EBITDA) » Target market and credit selection process facilitates: (i) conservative structures (first lien, lower leverage) in (ii) pri vat e equity - backed businesses with (iii) financial maintenance covenants generating (iv) attractive yields 1 Excludes investments in broadly syndicated loans; as of June 30, 2024, KBDC held $273 million of such investments (fair value ), representing ~15% of total fair market value of investments. 2 Weighted average yield of amortized cost of debt investments. 3 Excludes investments on watchlist. 4 NII yield is calculated by dividing annualized 2Q’24 NII per share by NAV per share at June 30, 2024. $1.85bn Fair Value of Portfolio 100% Financial Maint . Covenants (1) ~98% First Lien Senior Secured 99% Private Equity Sponsored Companies (1) 106 Portfolio Companies 3.2x Wtd. Avg. Interest Coverage (3) ~11.8% Wtd. Avg. Portfolio Yield (2) 4.1x Wtd. Avg. Net Leverage (3) KBDC OVERVIEW 1.0% Fair Value of Assets on Non - Accrual 12.3% NII Yield (4) Executive Summary Overview
7 Executive Summary Key Financial Highlights 1 Prior to 2024, the Company did not distinguish between regular and supplemental distributions and generally distributed subst ant ially all its income on a quarterly basis. » KBDC’s dividend yield is ~ 11 . 5 % inclusive of the three declared special distributions of $ 0 . 10 per share payable on December 20 , 2024 , March 18 , 2025 and June 24 , 2025 » As of June 30 , 2024 , KBDC had undistributed net investment income of approximately $ 0 . 20 per share ($000 except per share data) Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Net Investment Income $0.51 $0.52 $0.54 $0.53 $0.56 Net Realized and Unrealized Gains (Losses) ($0.05) $0.09 $0.01 ($0.19) ($0.02) Net Income (loss) $0.46 $0.61 $0.55 $0.34 $0.54 Net Asset Value $16.57 $16.63 $16.42 $16.40 $16.58 Annualized ROE (on Net Investment Income) 12.3% 12.5% 13.2% 12.9% 13.5% Annualized ROE (on Net Income) 11.1% 14.7% 13.4% 8.3% 13.0% Regular Distributions (1) $0.40 $0.40 $0.53 $0.53 $0.53 Supplemental Distributions - - - - - Special Distributions - - - - - Total Distributions $0.40 $0.40 $0.53 $0.53 $0.53 Regular Distribution Yield (1) 9.7% 9.6% 12.9% 12.9% 12.8% Supplemental Distribution Yield - - - - - Special Distribution Yield - - - - - Total Distribution Yield 9.7% 9.6% 12.9% 12.9% 12.8% Total Debt $622,000 $659,000 $695,750 $598,000 $641,000 Net Assets $1,178,176 $811,557 $683,056 $680,726 $646,926 Debt-to-Equity at Quarter End 0.53x 0.81x 1.02x 0.88x 0.99x As of Date and for the Three Months Ended
PORTFOLIO OVERVIEW
9 Portfolio Overview Key Statistics 1 1Q’24 and 2Q’24 includes investments in broadly syndicated loans; as of 2Q’24, KBDC held $273 million of such investments (fa ir value) across 22 borrowers. Quarters prior to 1Q’24 presented above included no investments in broadly syndicated loans. KEY PORTFOLIO STATISTICS ($ IN MILLIONS) (1) Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Portfolio Highlights Funded Investments at Fair Value $1,847 $1,784 $1,363 $1,278 $1,284 Number of Portfolio Companies 106 103 76 72 73 Average Position Size at Fair Value ($) $17.4 $17.3 $17.9 $17.8 $17.6 Average Position Size at Fair Value (%) 0.9% 1.0% 1.3% 1.4% 1.4% Portfolio Composition (at fair value) First Lien 98% 98% 97% 97% 97% Second Lien 0% 0% 0% 0% 0% Subordinated 1% 1% 2% 2% 2% Equity 1% 1% 1% 1% 1% Loans by Interest Rate Type % Floating Rate Debt Investments 100.0% 100.0% 100.0% 100.0% 100.0% % Fixed Rate Debt Investments 0.0% 0.0% 0.0% 0.0% 0.0% Asset Level Yields (at fair value) Weighted Average Yield on Private Credit Loans 12.3% 12.4% 12.5% 12.4% 12.3% Weighted Average Yield on Broadly Syndicated Loans 8.3% 8.4% N/A N/A N/A Weighted Average Yield on Debt Investments 11.7% 11.7% 12.5% 12.4% 12.3% Non-accrual Debt Investments (at fair value) Non-accrual Investments $18.9 $7.0 $5.9 $13.9 $0.0 Non-accrual Investments as a % of Debt Investments 1.0% 0.4% 0.4% 1.1% 0.0% Number of Investments on Non-accrual 2 1 1 1 0
10 Suave 2.2% Vitesse 1.9% American Equipment 1.9% EIS 1.9% Peak Technologies 1.9% Genuine Cable Group 1.9% Keany 1.8% Score Sports 1.8% EnviroTech 1.8% FreshEdge 1.8% All Others 81.0% Portfolio Overview Diversity (As of June 30, 2024) Note: Please see the Company’s filings with the SEC for more information about the Company’s portfolio 1 Calculated as a percentage of total debt investments at fair value. 2 In some instances, we have disclosed the borrower’s DBA name. INDUSTRY CONCENTRATION (1) BORROWER CONCENTRATION (1)(2) 106 Borrowers Average Position Size: 0.9% Trading Companies & Distributors 12.9% Food Products 9.6% Commercial Services & Supplies 8.1% Health Care Providers & Services 7.9% Containers and Packaging 6.1% Aerospace & Defense 5.4% Professional Services 5.1% Personal Care Products 4.0% Leisure Products 4.0% Machinery 3.2% All Others (23 Total) 33.7%
11 Portfolio Overview Asset Mix GROSS NEW COMMITMENTS ($ IN MILLIONS) (1) ASSET MIX AT END OF PERIOD (2) » KBDC committed approximately $171 million to new investments in 2Q’24 » Portfolio is 100% floating rate and nearly all first lien senior secured loans » Asset mix remains consistent at approximately 98% first lien senior secured ROLLING INVESTMENT ACTIVITY ($ IN MILLIONS) Note: Please see the Company’s filings with the SEC for more information about the Company’s portfolio. 1 Based on principal amount of investments and including unfunded commitments. 2 Based on fair market value of investments. 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Gross New Investment Commitments(1) $89 $57 $30 $153 $464 $171 Investment Fundings (Private Credit) 105 73 42 184 148 136 Investment Fundings (BSL) - - - - 302 30 Investments Repaid or Sold (Private Credit) (15) (42) (42) (97) (32) (41) Investments Repaid or Sold (BSL) - - - - - (58) Net Investment Activity $90 $31 $0 $87 $417 $67 97% 97% 97% 97% 98% 98% 2% 2% 2% 2% 1% 1% 1% 1% 1% 1% 1% 1% 0% 20% 40% 60% 80% 100% 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 First Lien Subordinated Debt Equity $89 $57 $30 $153 $464 $171 $- $100 $200 $300 $400 $500 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24
FINANCIAL HIGHLIGHTS
13 Financial Highlights Net Asset Value NAV PER SHARE BRIDGE 1 The amount shown includes the effect of the timing of capital transactions ( - $0.01 per share). » Net asset value of $16.57 per share as of June 30, 2024, was a decrease from $16.63 per share as of March 31, 2024, but an increase of $0.05 after considering the $0.11 per share dilution from the Company’s IPO ( $0.11 ) ( $0.06 ) ( $0.00 ) ( $0.27 ) ( $0.40 ) $16.63 $0.78 $16.57 $15.00 $15.50 $16.00 $16.50 $17.00 $17.50 1Q'24 NAV IPO Costs Interest Income Unrealized Gain (Loss) Realized Gain (Loss) Operating Expenses Dividends 2Q'24 NAV (1)
14 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 NII Yield 13.0% 13.5% 12.9% 13.2% 12.5% 12.3% Total Dividend Yield 11.3% 12.8% 12.9% 12.9% 9.6% 9.7% $0.47 $0.53 $0.53 $0.53 $0.40 $0.40 $- $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Financial Highlights Dividend History 1 Yields presented above calculated by dividing either (i) dividends or (ii) NII, as applicable by the net asset value per shar e a t the end of the quarter and annualizing such amount over four quarterly periods. 2 All amounts presented on a per share basis utilizing end of period share count. DIVIDEND HISTORY (2) DIVIDEND AND NII YIELD (1) » Prior to 2024 , KBDC did not distinguish between regular and supplemental distributions and generally distributed substantially all its income on a quarterly basis ▪ During 1 Q’ 24 , KBDC established a $ 0 . 40 per share regular dividend ▪ KBDC declared three special dividends payable on 12 / 20 / 24 , 3 / 18 / 25 and 6 / 24 / 25 following pre - IPO share lock - up expiration dates » To the extent that NII exceeds the regular dividend, we plan to pay quarterly supplemental and annual special dividends following the expiration of pre - IPO shareholder lock - ups in 2 Q’ 25
BALANCE SHEET AND OPERATING RESULTS
16 Balance Sheet Summary ($000 except per share data) Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Assets Long-term investments (fair value) $1,847,058 $1,784,045 $1,363,498 $1,277,603 $1,283,951 Short-term investments and cash 40,615 44,286 46,871 29,012 28,013 Receivable for principal pmts. on invest. 5,280 293 104 179 148 Interest receivable 16,780 15,551 12,874 13,718 12,270 Prepaid expenses and other assets 117 266 319 119 207 Total Assets $1,909,850 $1,844,441 $1,423,666 $1,320,631 $1,324,589 Liabilities Debt $622,000 $659,000 $695,750 $598,000 $641,000 Unamortized debt issuance costs (9,448) (5,639) (6,431) (5,289) (5,914) Payable for investments purchased 72,322 299,692 - - - Capital payable - 29,025 - - - Distributions payable 28,446 19,516 22,050 21,999 20,678 Management fee payable 3,780 3,522 2,996 2,905 2,848 Incentive fee payable - 16,826 14,195 11,692 9,320 Accrued expenses and other liabilities 14,574 10,942 12,050 10,598 9,731 Total Liabilities $731,674 $1,032,884 $740,610 $639,905 $677,663 Net Assets: Common Shares 71 49 42 42 39 Additional paid-in capital 1,154,108 790,245 669,990 668,505 626,581 Total distributable earnings (deficit) 23,997 21,263 13,024 12,179 20,306 Total Net Assets $1,178,176 $811,557 $683,056 $680,726 $646,926 Total Liabilities and Net Assets $1,909,850 $1,844,441 $1,423,666 $1,320,631 $1,324,589 Net Asset Value Per Common Share $16.57 $16.63 $16.42 $16.40 $16.58 Debt to equity at quarter end 0.53x 0.81x 1.02x 0.88x 0.99x Average debt to equity 0.57x 0.94x 0.91x 0.93x 1.04x
17 Operating Results Summary ($000 except per share data) Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Investment income: Interest and dividend income $52,453 $46,494 $42,695 $41,197 $40,746 Total investment income $52,453 $46,494 $42,695 $41,197 $40,746 Expenses: Management fees 4,251 3,522 2,995 2,905 2,848 Incentive fees 4,109 2,631 2,504 2,371 2,420 Interest expense 13,239 15,656 13,918 13,871 13,002 Other general and admin. expenses 1,041 882 845 681 743 Total expenses $22,640 $22,691 $20,262 $19,828 $19,013 Management fee waiver (471) - - - - Incentive fee waiver (4,109) - - - - Net expenses $18,060 $22,691 $20,262 $19,828 $19,013 Net investment income $34,393 $23,803 $22,433 $21,369 $21,733 Net realized gains (losses) (138) - (10,686) - - Net change in unrealized gains (losses) (3,075) 3,952 11,047 (7,497) (731) Net increase in net assets resulting from operations $31,180 $27,755 $22,794 $13,872 $21,002 Net investment income per share $0.51 $0.52 $0.54 $0.53 $0.56 Earnings per share $0.46 $0.61 $0.55 $0.34 $0.54 Weighted average shares outstanding 67,426,904 45,345,417 41,591,048 40,499,327 38,905,173 For the Three Months Ended
18 Balance Sheet and Liquidity Financing Profile Note: As of June 30, 2024 unless otherwise noted. 1 Reflects terms in amendment dated April 2, 2024; interest rate may be S+2.375 - 2.500% depending on the mix of investments securin g the facility. 2 Includes amortization of debt issuance and monitoring costs. DEBT FUNDING MIX ($ IN MILLIONS) FINANCING PER QUARTER ($ IN MILLIONS) » KBDC has diverse and adequate sources of liquidity to achieve its target debt - to - equity ratio of 1.00x to 1.25x » Debt capital is comprised of the following committed credit facilities and senior unsecured notes outstanding $644 $618 $622 $703 $569 8.1% 8.9% 9.0% 8.9% 9.3% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% $0 $200 $400 $600 $800 $1,000 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24 Average Daily Borrowing Average Interest Rate (2) Commitment Drawn Availability Pricing Maturity Corporate Facility $400.0 $75.0 $325.0 S + 2.35% February 18, 2027 Funding Facility II 150.0 83.0 67.0 S + 2.70% December 22, 2028 Funding Faclity(1) 600.0 389.0 211.0 S + 2.375% - 2.500% April 3, 2029 Series A Notes 25.0 25.0 - 8.65% June 30, 2027 Series B Notes 50.0 50.0 - 8.74% June 30, 2028 Total $1,225.0 $622.0 $603.0