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Barings BDC : IIQ 2020 Results – First Look

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BBDC has been plenty busy in recent months: unwinding a secured financing; using the opportunity to sell off many of its larger company syndicated loans (including several non performers); investing opportunistically at yields as high as 3x higher than before; arranging a phased unsecured debt financing for the first time, and more besides. The BDC’s metrics are good with NAV per share increasing by 10.8% and Net Investment Income Per Share a decent $0.14, only a penny down from the prior quarter. Most notably, liquidity remains GOOD by the BDC Reporter’s standards, giving management flexibility to invest; buy back stock or whatever. Debt to equity – adjusted for cash – is down to 1.0x, after having been at 1.20x. Management is maintaining the dividend at $0.16 for the moment, as we’ve been projecting in the BDC Data Table. Yes, the ROE leaves to be desired but – so far – BBDC stays in the relatively small club (12 out of 46) of public BDCs positioned to grow their balance sheets; maintain decent credit track records and not be forced to cut their distributions in 2020; while also not draining their liquidity or stretching their leverage. In the midst of a pandemic of uncertain resolution, that’s a victory. We just wonder – writing this in advance of the opening of the market – how investors will react given that BBDC is already trading at 14.1x its IIQ 2020 NIIPS annualized. How much higher – if at all – can investor admiration for the Barings approach push the BBDC stock price, which closed at $7.92 ?

For all the First Look reviews of IIQ 2020 BDC results, check out the BDC Data Table. We are constantly adding new updates as results come in and we undertake an initial survey. Besides these reports, we are also filling in NAV Per Share and investment portfolio size data to compare with prior periods; adding company or BDC Credit Reporter generated data on underperforming companies and assets and affirming or amending our earlier assessments of every BDC’s Liquidity, Credit, Dividend and Long Term Outlook

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