Goldman Sachs BDC Inc (GSBD) Q1 2025 Earnings Call Highlights: Navigating Market Challenges ...

GuruFocus News

Mon, May 12, 2025, 3:00 PM 4 min read

Release Date: May 09, 2025

For the implicit transcript of the net call, delight notation to the full net telephone transcript.

• Goldman Sachs BDC Inc (NYSE:GSBD) has a beardown portfolio with 96% of investments successful archetypal lien risk, providing a unafraid presumption successful the superior stack.

• The institution has a diversified portfolio with minimal vulnerability to planetary proviso chains, chiefly serving US customers successful service-based industries.

• GSBD's nett concern income per stock for the 4th was $0.42, indicating coagulated fiscal performance.

• The committee has enacted a revised dividend structure, including a basal dividend and supplemental adaptable distributions, aligning with semipermanent net power.

• The institution maintains a steadfast nett indebtedness to equity ratio of 1.16 times, beneath the people leverage ratio of 1.25 times, indicating beardown fiscal management.

• The macroeconomic situation remains challenging, with tariffs and imaginable recessionary impacts affecting woody travel and portfolio performance.

• The nett plus worth per stock decreased by 1.6% comparative to the 4th quarter, chiefly owed to peculiar dividends and nett realized and unrealized losses.

• The portfolio output declined by 40 ground points 4th implicit quarter, reflecting a alteration successful wide portfolio yield.

• Investments connected non-accrual presumption stay a concern, though they decreased somewhat to 1.9% of the full concern portfolio astatine just value.

• The institution faces a deficiency of caller M&A activity, with marketplace volatility pushing backmost the resurgence of caller deals.

• Warning! GuruFocus has detected 5 Warning Signs with GSBD.

Q: The portfolio output declined astir 40 ground points 4th implicit quarter. Could you explicate the reasons down this diminution and whether the portfolio has mostly repriced based connected the basal complaint cuts from past year? A: (Alex Ge, Co-CEO) The repricing has mostly subsided, with astir borrowers having taken vantage of a much robust situation successful anterior quarters. The diminution was driven by the exit of non-accrual positions with precocious coupons. However, spreads for caller deals widened by astir 25 ground points, and we leveraged our incumbency to unafraid amended spreads. (David Miller, Co-CEO) The exit of non-accrual positions, which had precocious coupons, contributed to the wide output decline, but it was affirmative arsenic it reduced non-accruals.

Q: Regarding the loans with nonstop tariff exposure, was this reflected successful the just worth of those investments arsenic of the archetypal quarter, oregon volition it beryllium determined successful consequent quarters? A: (Alex Ge, Co-CEO) The vulnerability doesn't needfully mean contiguous impact. We took a prospective look astatine imaginable impacts, categorizing companies with proviso concatenation vulnerability to China and Mexico conservatively. Any show deterioration would beryllium reflected successful the mark, but we haven't seen it yet. (David Miller, Co-CEO) We gained much clarity connected imaginable tariffs post-quarter end, truthful determination could beryllium much updates erstwhile last tariffs are confirmed.