Bain Capital Specialty Finance, Inc. Prices Public Offering of $350 Million 5.950% Senior Notes Due 2030

Rhea-AI Summary

Bain Capital Specialty Finance (NYSE: BCSF) has announced the pricing of $350 million aggregate principal amount of 5.950% senior notes due 2030. The notes will mature on March 15, 2030, with an option for early redemption at par one month prior to maturity. The offering is expected to close around February 6, 2025.

The company plans to use the net proceeds to repay outstanding secured indebtedness under its financing arrangements and for general corporate purposes. The offering is being managed by several financial institutions, with SMBC Nikko Securities America, Wells Fargo Securities, BNP Paribas Securities, Santander US Capital Markets, J.P. Morgan Securities, and MUFG Securities Americas acting as joint book-running managers.

Positive

• Successful pricing of $350 million senior notes offering
• Debt refinancing opportunity to manage existing secured indebtedness
• Strong syndicate of major financial institutions supporting the offering

Negative

• Additional long-term debt obligation at 5.950% interest rate
• Increased interest expense burden through 2030

Insights

Fixed Income Analyst

This $350 million senior notes offering at 5.95% represents a strategic debt restructuring move for BCSF. The replacement of secured debt with unsecured notes is particularly noteworthy as it potentially enhances financial flexibility by freeing up assets from existing secured facilities.

The 5.95% coupon rate appears competitive in the current market environment for Business Development Companies (BDCs), especially considering the notes' unsecured nature. The pricing suggests strong market confidence in BCSF's credit quality and business model. The 2030 maturity provides extended duration in the company's debt profile, while the one-month par call feature offers valuable optionality for liability management.

The strong syndicate of underwriters, led by major financial institutions, indicates robust institutional interest. This debt restructuring could potentially:

• Improve the company's secured debt to equity ratio
• Provide greater operational flexibility for future investments
• Create a more diversified funding structure
• Potentially reduce overall borrowing costs if used to retire higher-cost secured debt

The timing of this offering aligns with market expectations of potentially lower interest rates ahead, allowing BCSF to lock in medium-term financing at current rates. The successful pricing of this size of offering demonstrates continued market appetite for BDC debt securities and could set a benchmark for similar issuances in the sector.

BOSTON--(BUSINESS WIRE)-- Bain Capital Specialty Finance, Inc. (NYSE: BCSF or the “Company”) today announced that it has priced an offering of $350 million aggregate principal amount of 5.950% senior notes due 2030 (the “Notes”). The Notes will mature on March 15, 2030 and may be redeemed in whole or in part at the Company’s option at any time at par plus a “make-whole” premium, provided that the Notes may be redeemed at par one month prior to their maturity.

The offering is expected to close on or about February 6, 2025, subject to satisfaction of customary closing conditions.

The Company intends to use the net proceeds of this offering to repay outstanding secured indebtedness under its financing arrangements and for general corporate purposes.

SMBC Nikko Securities America, Inc., Wells Fargo Securities, LLC, BNP Paribas Securities Corp., Santander US Capital Markets LLC, J.P. Morgan Securities LLC and MUFG Securities Americas Inc. are acting as joint book-running managers for this offering. BNY Mellon Capital Markets, LLC, Deutsche Bank Securities Inc., Keefe, Bruyette & Woods, Inc., Natixis Securities Americas LLC and U.S. Bancorp Investments, Inc. are acting as co-managers for this offering.

Investors are advised to carefully consider the investment objectives, risks and charges and expenses of BCSF before investing. The pricing term sheet dated January 30, 2025, the preliminary prospectus supplement dated January 30, 2025, and the accompanying prospectus dated July 1, 2022, each of which has been filed with the U.S. Securities and Exchange Commission (the “SEC”), contain this and other information about BCSF and should be read carefully before investing.

The information in the pricing term sheet, the preliminary prospectus supplement, the accompanying prospectus and this press release is not complete and may be changed. The pricing term sheet, the preliminary prospectus supplement, the accompanying prospectus and this press release are not offers to sell any securities of BCSF and are not soliciting an offer to buy such securities in any state or jurisdiction where such offer and sale is not permitted.

An effective shelf registration statement relating to the Notes is on file with the SEC and is effective. The offering may be made only by means of a preliminary prospectus supplement and an accompanying prospectus, copies of which may be obtained from the website of the SEC at www.sec.gov or from SMBC Nikko Securities America, Inc., 277 Park Avenue, 5^th Floor, New York, New York 10172 or toll-free at 212-224-5135, Wells Fargo Securities, LLC, 608 2nd Avenue South, Suite 1000, Minneapolis, MN 55402 Attn: WFS Customer Service or toll-free at 1-800-645-3751, BNP Paribas Securities Corp., 787 Seventh Avenue, New York, New York 10019 or toll-free at 1-800-854-5674 or Santander US Capital Markets LLC, 437 Madison Avenue, New York, New York 10022 or toll-free at 1-855-403-3636.

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, LP, an SEC-registered investment adviser and a subsidiary of Bain Capital Credit, LP. Since commencing investment operations on October 13, 2016, and through September 30, 2024, BCSF has invested approximately $8,132.9 million 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

This letter 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 in this letter 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 SEC. 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 letter.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250130741513/en/

Investor:

Katherine Schneider

Tel. (212) 803-9613

investors@baincapitalbdc.com



Media:

Charlyn Lusk

Tel. (646) 502-3549

clusk@stantonprm.com

Source: Bain Capital Specialty Finance, Inc.

FAQ

What is the interest rate and maturity date for BCSF's 2025 senior notes offering?

The senior notes offering has a 5.950% interest rate and will mature on March 15, 2030.

How much did BCSF raise in their January 2025 senior notes offering?

BCSF priced an offering of $350 million aggregate principal amount of senior notes.

What will BCSF use the proceeds from the 2025 senior notes offering for?

BCSF intends to use the net proceeds to repay outstanding secured indebtedness under its financing arrangements and for general corporate purposes.

When is the expected closing date for BCSF's 2025 senior notes offering?

The offering is expected to close on or about February 6, 2025, subject to customary closing conditions.

What are the redemption terms for BCSF's 2030 senior notes?

The notes may be redeemed at any time at par plus a make-whole premium, or at par one month prior to their maturity.