Golub Capital BDC, Inc. Declares Fiscal Year 2017 Third Quarter Distribution of $0.32 Per Share and Announces Fiscal Year 2017 Second Quarter Financial Results

NEW YORK, May 4, 2017 /PRNewswire/ -- Golub Capital BDC, Inc., a business development company (NASDAQ: GBDC), today announced its financial results for its second fiscal quarter ended March 31, 2017.

Except where the context suggests otherwise, the terms "we," "us," "our," and "Company" refer to Golub Capital BDC, Inc. and its consolidated subsidiaries. "GC Advisors" refers to GC Advisors LLC, our investment adviser.

Second Fiscal Quarter 2017 Highlights

• Net increase in net assets resulting from operations for the quarter ended March 31, 2017 was $20.7 million, or $0.38 per share, as compared to $19.0 million, or $0.34 per share, for the quarter ended December 31, 2016;
• Net investment income for the quarter ended March 31, 2017 was $16.5 million, or $0.30 per share, as compared to $16.9 million, or $0.31 per share, for the quarter ended December 31, 2016;
• Net investment income for the quarter ended March 31, 2017 excluding a $0.9 million accrual for the capital gain incentive fee under GAAP was $17.4 million, or $0.32 per share, as compared to $17.4 million, or $0.32 per share, when excluding a $0.5 million accrual for the capital gain incentive fee under GAAP for the quarter ended December 31, 2016;
• Net gain on investments and secured borrowings for the quarter ended March 31, 2017 was $4.2 million, or $0.08 per share, as compared to a net gain of $2.0 million, or $0.03 per share, for the quarter ended December 31, 2016; and
• Our board of directors declared on May 4, 2017 a quarterly distribution of $0.32 per share payable on June 29, 2017 to stockholders of record as of June 6, 2017.

Portfolio and Investment Activities

As of March 31, 2017, the Company had investments in 185 portfolio companies with a total fair value of $1,617.9 million and had investments in Senior Loan Fund LLC ("SLF") with a total fair value of $116.1 million. This compares to the Company's portfolio as of December 31, 2016, as of which date the Company had investments in 182 portfolio companies with a total fair value of $1,587.5 million and investments in SLF with a total fair value of $108.8 million. Investments in portfolio companies as of March 31, 2017 and December 31, 2016 consisted of the following:

The following table shows the asset mix of our new investment commitments for the three months ended March 31, 2017:

Overall, total investments at fair value increased by 2.2%, or $37.7 million, during the three months ended March 31, 2017 after factoring in debt repayments, sales of securities, net fundings on revolvers and net change in unrealized gain (loss). Total investments at fair value held by SLF increased by 5.2%, or $17.4 million, after factoring in debt repayments, sales of securities, net fundings on revolvers and net change in unrealized gain (loss).

On May 2, 2017, Golub Capital BDC Funding LLC, a wholly-owned subsidiary of the Company, entered into an amendment to the documents governing its credit facility with Wells Fargo Securities, LLC, as administrative agent, and Wells Fargo Bank, N.A., as lender, which amendment, was effective as of May 2, 2017 and, among other things, increased the size of the credit facility from $200 million to $225 million and allowed for the addition of a third lender under the facility.

For the three months ended March 31, 2017, the weighted average annualized investment income yield (which includes interest and fee income and amortization of capitalized fees and discounts) and the weighted average annualized income yield (which excludes income resulting from amortization of capitalized fees and discounts) on the fair value of earning portfolio company investments in the Company's portfolio were 8.2% and 7.7%, respectively.

Consolidated Results of Operations

Total investment income for the quarters ended March 31, 2017 and December 31, 2016 was $33.6 million and $33.8 million, respectively. This $0.2 million decrease was primarily attributable to a decrease in dividend income from equity investments, excluding our investment in SLF, during the quarter ended March 31, 2017.

Total expenses for the quarters ended March 31, 2017 and December 31, 2016 were $17.0 million and $16.9 million, respectively. This $0.1 million increase was primarily attributable to an increase in professional fees.

During the quarter ended March 31, 2017, the Company recorded a net realized gain of $0.7 million and recorded net unrealized appreciation of $3.5 million. The net realized gain was primarily due to the net realized gains on the sale of portfolio company investments to SLF and the sale of an equity investment. The net unrealized appreciation was due to net unrealized appreciation on several middle market debt and equity securities.

Liquidity and Capital Resources

The Company's liquidity and capital resources are derived from the Company's debt securitizations, U.S. Small Business Administration ("SBA") debentures, revolving credit facilities and cash flow from operations. The Company's primary uses of funds from operations include investments in portfolio companies and payment of fees and other expenses that the Company incurs. The Company has used, and expects to continue to use, its debt securitizations, SBA debentures, revolving credit facilities, proceeds from its investment portfolio and proceeds from offerings of its securities and its dividend reinvestment plan to finance its investment objectives.

As of March 31, 2017, the Company had cash and cash equivalents of $4.6 million, restricted cash and cash equivalents of $39.3 million and $864.1 million of debt and secured borrowings outstanding. As of March 31, 2017, the Company had $70.3 million of remaining commitments and $35.1 million available for additional borrowings on its revolving credit facility, subject to leverage and borrowing base restrictions. As of March 31, 2017, through our SBIC licensees, we had $67.0 million of debenture commitments, of which $17.0 million was available to be drawn, subject to customary SBA regulatory requirements.

On March 21, 2017, the Company priced a public offering of 1,750,000 shares of its common stock at a public offering price of $19.03 per share, raising approximately $32.3 million in net proceeds after underwriting discounts and commissions. On April 6, 2017, the Company sold an additional 262,500 shares of our common stock at a public offering price of $19.03 per share pursuant to the underwriter's exercise of the option to purchase additional shares granted in connection with the public offering in March 2017.

On May 4, 2017, the Company's Board of Directors declared a quarterly distribution of $0.32 per share, payable on June 29, 2017 to holders of record as of June 6, 2017.

Portfolio and Asset Quality

GC Advisors regularly assesses the risk profile of each of the Company's investments and rates each of them based on an internal system developed by Golub Capital and its affiliates. This system is not generally accepted in our industry or used by our competitors. It is based on the following categories, which we refer to as GC Advisors' internal performance ratings:

Our internal performance ratings do not constitute any rating of investments by a nationally recognized statistical rating organization or represent or reflect any third-party assessment of any of our investments.

The following table shows the distribution of the Company's investments on the 1 to 5 internal performance rating scale at fair value as of March 31, 2017 and December 31, 2016:

Conference Call

The Company will host an earnings conference call at 11:00 a.m. (Eastern Time) on Friday, May 5, 2017 to discuss the quarterly financial results. All interested parties may participate in the conference call by dialing (800) 679-2940 approximately 10-15 minutes prior to the call; international callers should dial (303) 223-4378. Participants should reference Golub Capital BDC, Inc. when prompted. For a slide presentation that we intend to refer to on the earnings conference call, please visit the Investor Resources link on the homepage of our website (www.golubcapitalbdc.com) and click on the Quarter Ended 3.31.17 Investor Presentation under Events/Presentations. An archived replay of the call will be available shortly after the call until 1:00 p.m. (Eastern Time) on June 4, 2017. To hear the replay, please dial (800) 633-8284. International dialers, please dial (402) 977-9140. For all replays, please reference program ID number 21849940.

ABOUT GOLUB CAPITAL BDC, INC.

Golub Capital BDC, Inc. ("Golub Capital BDC") is an externally-managed, non-diversified closed-end management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Golub Capital BDC invests primarily in senior secured and one stop loans of U.S. middle-market companies that are often sponsored by private equity investors. Golub Capital BDC's investment activities are managed by its investment adviser, GC Advisors LLC, an affiliate of the Golub Capital group of companies ("Golub Capital").

ABOUT GOLUB CAPITAL

Golub Capital is a nationally recognized credit asset manager with over $20 billion of capital under management. For over 20 years, the firm has provided credit to help medium-sized U.S. businesses grow. The firm's award-winning middle market lending business helps provide financing for middle market companies and their private equity sponsors. Golub Capital's credit expertise also forms the foundation of its Late Stage Lending and Broadly Syndicated Loan businesses. Golub Capital has worked hard to build a reputation as a fast, reliable provider of compelling financing solutions, and we believe this has inspired repeat clients and investors. Today, the firm has over 300 employees with lending offices in Chicago, New York and San Francisco. For more information, please visit www.golubcapital.com.

FORWARD-LOOKING STATEMENTS

This press release 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 press release 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 expressed or implied in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. Golub Capital BDC, Inc. 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.

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SOURCE Golub Capital BDC, Inc.