Bain Capital Specialty Finance, Inc. Increases and Extends Its Revolving Credit Facility

Rhea-AI Summary

Bain Capital Specialty Finance (NYSE: BCSF) announced an increase in commitments under its senior secured revolving credit facility with Sumitomo Mitsui Banking from $665 million to $855 million, extending the maturity date to May 18, 2029. The number of lenders increased to 14 without changing borrowing costs. The interest rate remains based on SOFR with a 0.10% credit spread adjustment and an additional percentage depending on debt outstanding. CEO Michael Ewald and CFO Amit Joshi emphasized the facility's role in enhancing the company's capital position and supporting investment opportunities.

Positive

• Increased credit facility from $665 million to $855 million.
• Extended maturity date to May 18, 2029, from December 24, 2026.
• Attracted new lenders, increasing the total to 14.
• Maintained borrowing costs unchanged.
• Strengthened capital position for potential investment opportunities.

Negative

• SOFR-based interest rates could be volatile.
• Higher debt levels could lead to increased financial risk.
• Long-term commitments might decrease financial flexibility.

Insights

Financial Analyst

Bain Capital Specialty Finance, Inc.'s recent increase in their revolving credit facility from $665 million to $855 million and extension of the maturity date to May 18, 2029, is noteworthy. This move indicates a stronger capital position, allowing the company to better manage its investment opportunities over a longer horizon. The unchanged borrowing costs are beneficial as they maintain the company's current financial commitments without additional expenses. Additionally, the increase in lenders to 14 is a positive sign, showcasing confidence from financial institutions in Bain Capital's stability and growth potential.

For retail investors, this expansion could signal that the company is well-prepared to capitalize on future investment opportunities. However, it's important to note that the terms of the credit facility, such as the SOFR-based interest rate, could be subject to changes in the broader financial environment, which may impact future borrowing costs. In the short term, the strengthened liquidity is favorable, but investors should also consider how this debt may impact long-term profitability and leverage ratios.

Market Research Analyst

The extension of the maturity date to 2029 provides long-term stability for Bain Capital Specialty Finance, Inc. In the current economic environment, having a diversified and long-dated liability structure is crucial. The ability to attract additional lenders is also indicative of a strong reputation in the market, potentially enhancing investor confidence. The consistency in borrowing costs suggests that Bain Capital has negotiated favorable terms, likely reflecting their solid financial standing and strategic relationships with banks.

From an investor's viewpoint, this move enhances the company's financial flexibility, important for seizing market opportunities without the immediate pressure of liquidity constraints. However, it's essential to monitor how the company utilizes this extended credit line and whether it translates into profitable investments. The balance between leveraging this credit facility and maintaining financial health will be key for long-term growth.

BOSTON--(BUSINESS WIRE)-- Bain Capital Specialty Finance, Inc. (NYSE: BCSF, the “Company”, “our” or “we”) announced today that it has increased commitments under its senior secured revolving credit facility with Sumitomo Mitsui Banking Corporation as administrative agent (the “Sumitomo Credit Facility”) to $855 million from $665 million and extended the maturity date to May 18, 2029 from December 24, 2026. The total number of lenders to the Sumitomo Credit Facility increased to 14.

There was no change in borrowing costs in connection with the amendment of the Sumitomo Credit Facility. The stated interest rate on the facility with respect to term benchmark loans denominated in Dollars is (i) SOFR, plus (ii) a 0.10% credit spread adjustment, plus (iii) depending on debt outstanding and subject to borrowing base conditions, (a) 1.875% per annum or (b) 1.75% per annum.

“We are pleased to grow the size of our credit facility by attracting new lenders to our platform and extending the maturity,” said Michael Ewald, Chief Executive Officer of BCSF. “These changes further strengthen our capital position as we seek to capitalize on investment opportunities in the current environment.”

“We appreciate the support from our bank relationships we have developed across the Bain Capital platform,” said Amit Joshi, Chief Financial Officer of BCSF. “Our financing strategy for the Company remains focused on a diversified and long-dated liability structure with a strong liquidity and funding profile.”

About Bain Capital Specialty Finance, Inc.

Bain Capital Specialty Finance, Inc. is an externally managed specialty finance company focused on lending to middle-market companies. BCSF is managed by BCSF Advisors, L.P., an SEC-registered investment adviser and a subsidiary of Bain Capital Credit, L.P. Since commencing investment operations on October 13, 2016, and through March 31, 2024, BCSF has invested approximately $7.4 billion in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments. BCSF’s investment objective is to generate current income and, to a lesser extent, capital appreciation through direct originations of secured debt, including first lien, first lien/last out, unitranche and second lien debt, investments in strategic joint ventures, equity investments and, to a lesser extent, corporate bonds. BCSF has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended.

Forward-Looking Statements

Certain information contained herein may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included herein may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the U.S. Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240521368206/en/

Investor Contact:

Katherine Schneider

Tel. (212) 803-9613

investors@baincapitalbdc.com

Media Contact:

Charlyn Lusk

Tel. (646) 502-3549

clusk@stantonprm.com

Source: Bain Capital Specialty Finance, Inc.

FAQ

What is BCSF's new credit facility amount?

Bain Capital Specialty Finance increased its credit facility to $855 million.

Until when is BCSF's credit facility extended?

The credit facility maturity date is extended to May 18, 2029.

Did BCSF's borrowing costs change?

No, there was no change in borrowing costs.

How many lenders are now part of BCSF's credit facility?

The number of lenders increased to 14.

What is the interest rate on BCSF's credit facility?

The interest rate is based on SOFR plus a 0.10% credit spread adjustment and an additional 1.875% or 1.75% per annum.