Bain Capital Specialty Finance, Inc. (NYSE: BCSF, the “Company”, “our” or “we”) today announced financial results for the first quarter ended March 31, 2022, and that its Board of Directors has declared a dividend of $0.34 per share for the second quarter of 2022.

“We are pleased to deliver strong first quarter earnings results driven by solid net investment income and net gains, reflecting the continued improving credit quality across our diversified portfolio,” said Michael Ewald, Chief Executive Officer of BCSF. “Additionally, the recent formation of our joint venture positions BCSF well as we continue to execute on our long-standing strategy of investing in senior secured loans to middle market companies.”

QUARTERLY HIGHLIGHTS

• Net investment income per share was $0.34, as compared to $0.34 for the quarter ended December 31, 2021;
• Net income per share was $0.52, as compared to $0.35 for the quarter ended December 31, 2021;
• Net asset value per share as of March 31, 2022 was $17.22, as compared to $17.04 as of December 31, 2021;
• In February 2022, the Company announced the formation of Bain Capital Senior Loan Program, LLC (“SLP”). The SLP will provide BCSF with greater balance sheet flexibility to capitalize on senior middle market loan opportunities to borrowers in North America;
• During the quarter, the Company made new investment fundings of $371.0 million. Sales and repayment activity totaled $169.5 million, resulting in net investment fundings of $201.5 million. In addition, BCSF contributed $351.5 million of investments to SLP, resulting in a net funded portfolio change of $(150.0) million⁽¹⁾;
• Ending debt-to-equity and debt-to-equity (net of cash) ratios were 0.99x and 0.89x, respectively, as compared to 1.30x and 1.12x, respectively, as of December 31, 2021;
• No investments were on non-accrual status as of March 31, 2022;
• Subsequent to quarter-end, the Company’s Board of Directors declared a dividend of $0.34 per share for the second quarter of 2022 payable to stockholders of record as of June 30, 2022⁽²⁾; and
• In April 2022, Fitch Ratings assigned the Company an investment grade rating of BBB- and Stable outlook.

SELECTED FINANCIAL HIGHLIGHTS

PORTFOLIO AND INVESTMENT ACTIVITY

For the three months ended March 31, 2022, the Company invested $371.0 million in 42 portfolio companies, including $246.7 million in 11 new companies, $72.2 million in 29 existing companies, $10.7 million in International Senior Loan Program, LLC (“ISLP”) and $41.4 million in SLP. The Company had $169.5 million of principal repayments and sales in the quarter, resulting in net investment fundings of $201.5 million. In addition, the Company contributed $351.5 million of investments to SLP, resulting in a net funded portfolio change of $(150.0) million.

For the three months ended March 31, 2022, ISLP invested $54.9 million in six portfolio companies. ISLP had $27.7 million of principal repayments and sales in the quarter. On a net basis, ISLP’s investments in the quarter totaled $27.2 million.

Investment Activity for the Quarter Ended March 31, 2022:

As of March 31, 2022, the Company’s investment portfolio had a fair value of $2,154.7 million, comprised of investments in 115 portfolio companies operating across 29 different industries.

Investment Portfolio at Fair Value as of March 31, 2022:

As of March 31, 2022, the weighted average yield on the investment portfolio at amortized cost and fair value were 7.9% and 8.1%, respectively, as compared to 7.6% and 7.8%, respectively, as of December 31, 2021.⁽³⁾ 96.3% of the Company’s debt investments at fair value were in floating rate securities.

As of March 31, 2022, no investments were on non-accrual status.

As of March 31, 2022, ISLP’s investment portfolio had an aggregate fair value of $519.8 million, comprised of investments in 27 portfolio companies operating across 11 different industries. The investment portfolio on a fair value basis was comprised of 97.0% first lien senior secured loans and 3.0% second lien senior secured loans. 100% of ISLP’s debt investments at fair value were in floating rate securities.

As of March 31, 2022, SLP’s investment portfolio had an aggregate fair value of $372.3 million, comprised of investments in 41 portfolio companies operating across 21 different industries.⁽¹⁾ The investment portfolio on a fair value basis was comprised of 97.3% first lien senior secured loans and 2.7% second lien senior secured loans. 100% of SLP’s debt investments at fair value were in floating rate securities.

RESULTS OF OPERATIONS

For the three months ended March 31, 2022 and December 31, 2021, total investment income was $46.0 million and $51.5 million, respectively. The decrease in investment income was primarily due to a decrease in prepayment related income and dividend income.

Total expenses (before taxes) for the three months ended March 31, 2022 and December 31, 2021 were $24.3 million and $29.5 million, respectively. The decrease was primarily driven by a decrease in interest and debt financing expenses.

Net investment income for the three months ended March 31, 2022 and December 31, 2021 was $21.7 million or $0.34 per share and $21.9 million or $0.34 per share, respectively.

During the three months ended March 31, 2022, the Company had net realized and unrealized gains of $12.0 million.

Net increase in net assets resulting from operations for the three months ended March 31, 2022 was $33.7 million, or $0.52 per share.

CAPITAL AND LIQUIDITY

As of March 31, 2022, the Company had total principal debt outstanding of $1,104.0 million, including $39.0 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, $112.5 million outstanding in the Company’s senior unsecured notes due 2023, $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.

For the three months ended March 31, 2022, the weighted average interest rate on debt outstanding was 2.9%, as compared to 2.9% for the three months ended December 31, 2021.

As of March 31, 2022, the Company had cash and cash equivalents (including foreign cash) of $80.8 million, $261.0 million of capacity under its Sumitomo Credit Facility and $50.0 million of capacity under the Revolving Advisor Loan. As of March 31, 2022, the Company had $235.1 million of undrawn investment commitments.

As of March 31, 2022, the Company’s debt-to-equity and debt-to-equity (net of cash) ratios were 0.99x and 0.89x, respectively, as compared to 1.30x and 1.12x, respectively, as of December 31, 2021.

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 May 6, 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: 1-323-794-2551
• Conference ID: 3117358

All participants will need to reference “Bain Capital Specialty Finance - First Quarter Ended March 31, 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 May 13, 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: 3117358#

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 March 31, 2022, BCSF has invested approximately $5.3 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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