Bain Capital Specialty Finance, Inc. (NYSE: BCSF, the “Company”, “our” or “we”) today announced financial results for the third quarter ended September 30, 2022, and that its Board of Directors has declared a dividend of $0.36 per share for the fourth quarter of 2022.

“We delivered positive third quarter earnings driven by strong interest income generated across our diversified portfolio of largely floating rate loans, which benefitted from the rise in interest rates, and the continued credit stability across our portfolio,” said Michael Ewald, Chief Executive Officer of BCSF. “We are raising our regular quarterly dividend by 6% to $0.36 per share to reflect our improved outlook on the Company’s earnings power and the strength of our portfolio to navigate the current market environment.”

QUARTERLY HIGHLIGHTS

• Net investment income per share was $0.53, as compared to $0.41 for the quarter ended June 30, 2022;
• Net income per share was $0.17, as compared to $0.27 for the quarter ended June 30, 2022;
• Net asset value per share as of September 30, 2022 was $16.98, as compared to $17.15 as of June 30, 2022;
• Gross and net investment fundings were $433.0 million and $36.5 million, respectively; Ending debt-to-equity (net of cash) was 1.20x, as compared to 1.07x as of June 30, 2022;
• The Company increased the amount of commitments to its Sumitomo Credit Facility to $635.0 million, up from $300.0 million; and
• Subsequent to quarter-end, the Company’s Board of Directors increased its quarterly regular dividend by $0.02 per share to $0.36 per share for the fourth quarter to stockholders of record as of December 31, 2022⁽¹⁾.

SELECTED FINANCIAL HIGHLIGHTS

PORTFOLIO AND INVESTMENT ACTIVITY

For the three months ended September 30, 2022, the Company invested $433.0 million in 59 portfolio companies, including $270.2 million in nine new companies, $106.6 million in 48 existing companies, $41.0 million in International Senior Loan Program, LLC (“ISLP”) and $15.2 million in Bain Capital Senior Loan Program (“SLP”). The Company had $396.5 million of principal repayments and sales in the quarter, resulting in net investment fundings of $36.5 million.

Investment Activity for the Quarter Ended September 30, 2022:

As of September 30, 2022, the Company’s investment portfolio had a fair value of $2,293.5 million, comprised of investments in 130 portfolio companies operating across 32 different industries.

Investment Portfolio at Fair Value as of September 30, 2022:

As of September 30, 2022, the weighted average yield on the investment portfolio at amortized cost and fair value were 10.2% and 10.6%, respectively, as compared to 8.5% and 8.8%, respectively, as of June 30, 2022.⁽²⁾ 93.6% of the Company’s debt investments at fair value were in floating rate securities.

As of September 30, 2022, two portfolio companies were on non-accrual status, representing 3.1% and 1.7% of the total investment portfolio at amortized cost and fair value, respectively.

As of September 30, 2022, ISLP’s investment portfolio had an aggregate fair value of $623.0 million, comprised of investments in 34 portfolio companies operating across 15 different industries. The investment portfolio on a fair value basis was comprised of 96.0% first lien senior secured loans, 2.9% second lien senior secured loans and 1.1% equity interest. 100% of ISLP’s debt investments at fair value were in floating rate securities.

As of September 30, 2022, SLP’s investment portfolio had an aggregate fair value of $570.6 million, comprised of investments in 51 portfolio companies operating across 22 different industries.⁽³⁾ The investment portfolio on a fair value basis was comprised of 96.2% first lien senior secured loans and 3.8% second lien senior secured loans. 98.2% of SLP’s debt investments at fair value were in floating rate securities.

RESULTS OF OPERATIONS

For the three months ended September 30, 2022 and June 30, 2022, total investment income was $62.8 million and $52.4 million, respectively. The increase in investment income was primarily due to an increase in interest income as a result of rising base rates.

Total expenses (before taxes) for the three months ended September 30, 2022 and June 30, 2022 were $28.7 million and $25.6 million, respectively. The increase was primarily driven by an increase in interest and debt financing expenses, partially offset by a decrease in incentive fees.

Net investment income for the three months ended September 30, 2022 and June 30, 2022 was $34.1 million or $0.53 per share and $26.7 million or $0.41 per share, respectively.

During the three months ended September 30, 2022, the Company had net realized and unrealized gains (losses) of $(23.1) million.

Net increase in net assets resulting from operations for the three months ended September 30, 2022 was $11.1 million, or $0.17 per share.

CAPITAL AND LIQUIDITY

As of September 30, 2022, the Company had total principal debt outstanding of $1,370.5 million, including $418.0 million outstanding in the Company’s Sumitomo Credit Facility, $352.5 million outstanding of the debt issued through BCC Middle Market CLO 2019-1 LLC, $300.0 million outstanding in the Company’s senior unsecured notes due March 2026 and $300.0 million outstanding in the Company’s senior unsecured notes due October 2026.

During the quarter, the Company repaid in full $150.0 million in aggregate principal amount committed, including the principal amount outstanding of $112.5 million, of senior unsecured notes due in June 2023 (the “2023 Notes”). The 2023 Notes were prepaid at 100% of their principal amount, plus accrued and unpaid interest thereon, on September 6, 2022.

For the three months ended September 30, 2022, the weighted average interest rate on debt outstanding was 3.7%, as compared to 3.2% for the three months ended June 30, 2022.

As of September 30, 2022, the Company had cash and cash equivalents (including foreign cash) of $44.2 million, $217.0 million of capacity under its Sumitomo Credit Facility and $50.0 million of capacity under the Revolving Advisor Loan. As of September 30, 2022, the Company had $307.3 million of undrawn investment commitments.

As of September 30, 2022, the Company’s debt-to-equity and debt-to-equity (net of cash) ratios were 1.25x and 1.20x, respectively, as compared to 1.14x and 1.07x, respectively, as of June 30, 2022.

Endnotes

CONFERENCE CALL INFORMATION

A conference call to discuss the Company’s financial results will be held live at 8:30 a.m. Eastern Time on November 10, 2022. Please visit BCSF’s webcast link located on the Events & Presentations page of the Investor Resources section of BCSF’s website at http://www.baincapitalbdc.com for a slide presentation that complements the Earnings Conference Call.

Participants are also invited to access the conference call by dialing one of the following numbers:

• Domestic: 1-888-204-4368
• International: 1-323-994-2093
• Conference ID: 6606318

All participants will need to reference “Bain Capital Specialty Finance - Third Quarter Ended September 30, 2022 Earnings Conference Call” once connected with the operator. All participants are asked to dial in 10-15 minutes prior to the call.

Replay Information:

An archived replay will be available approximately three hours after the conference call concludes through November 17, 2022 via a webcast link located on the Investor Resources section of BCSF’s website, and via the dial-in numbers listed below:

• Domestic: 1-844-512-2921
• International: 1-412-317-6671
• Conference ID: 6606318#

Bain Capital Specialty Finance, Inc.

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share data)

See Notes to Consolidated Financial Statements

Bain Capital Specialty Finance, Inc.

Consolidated Statements of Operations

(in thousands, except share and per share data)

(Unaudited)

See Notes to Consolidated Financial Statements

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, 2022, BCSF has invested approximately $6.2 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

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 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 letter.

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