Barings BDC, Inc. (BBDC) Earnings Call Transcript & Summary

Hello, everyone, and welcome to the 2021 Annual Meeting of Stockholders for Barings BDC Inc. Before we get started, I would like to go over a few items so you know how to participate in today's meeting. You will have the opportunity to submit text questions to today's presenters by typing your questions into the question box located on the virtual shareholder meeting site. You may send in your questions at any time during the meeting. We and the company will collect and address the appropriate questions during the Q&A session following the end of today's stockholder meeting. Today's meeting is being recorded. I would now like to introduce Mr. Eric Lloyd of Barings BDC, Inc.

Good morning, ladies and gentlemen. My name is Eric Lloyd, and I serve as both a Director and as Chief Executive Officer of Barings BDC, Inc. It is my pleasure, on behalf of the company's Board of Directors and officers, to welcome you to the company's 2021 Annual Meeting of Stockholders. We appreciate you attending today's meeting and hope you and your families are staying safe and healthy. We are participating in this meeting virtually. We are pleased to hold our annual stockholders' meeting virtually as we aim to increase access and participation. As a reminder, stockholders may submit questions at any time during this meeting by typing your questions into the question box located on the virtual shareholder meeting site. At this time, I'd like to introduce Mike Freno, the Chairman of the Board of Barings BDC, who will call the meeting to order.

Thank you, Eric, and good morning, everyone. Thank you for being here. I'm formally calling the meeting -- the Annual Meeting to order. I would like to take this opportunity to first introduce our executive officers and members of the company's Board of Directors who are in attendance today. First, Eric Lloyd, who you've already met this morning; our President, Ian Fowler; our Chief Financial Officer, Jonathan Bock; our Chief Compliance Officer, Michael Cowart; our Chief Legal Officer, Jill Dinerman; our Principal Accounting Officer, Elizabeth Murray; and the remaining members of our Board of Directors, David Mihalick, Mark Mulhern, Tom Okel, Jill Olmstead, John Switzer and Robert Knapp. In accordance with our bylaws, I will act as Chairman of the Meeting, and Ashlee Steinnerd will act as Secretary of the Meeting. Michael Barbera of American Election Services, LLC, has been appointed Inspector of Election for today's meeting. The inspector will determine the presence of a quorum and serve as a judge on voting on all matters requiring a stockholder vote at this meeting. I request that Mr. Barbera file his oath of office with the company for inclusion in the records for this meeting. Will the Secretary please report on the proof of notice of meeting.

Yes. Thank you, Mr. Chairman. I have an affidavit of mailing from Broadridge Financial Solutions, Inc., the company's proxy solicitor, certifying as to the giving of notice of this meeting and the sending to stockholders of record as of March 12, 2021, the notice of annual meeting and proxy statement, all of which Broadridge commenced distributing to stockholders on March 26, 2021. I also have a copy of the company's 2020 annual report, which includes financial statements certified by KPMG and Ernst & Young. A copy of this annual report was sent or made available to each stockholder entitled to vote at this meeting, and an electronic copy of the annual report is available free of charge on the company's website. The notice of meeting and affidavit of mailing, together with the attachments thereto, will be filed with the records for this meeting.

Thank you, Ms. Steinnerd. As stated in the notice of annual meeting, the principal items of business for consideration at this meeting are as follows. Proposal #1: To elect 3 Class III directors, Mr. David Mihalick, Mr. Thomas Okel, and Ms. Jill Olmstead, to serve a -- for a 3-year terms and until their successors have been duly elected and qualified. Proposal #2: To approve a proposal to authorize the company, pursuant to the subsequent approval of its Board of Directors, to issue and sell shares of its common stock at a price below the company's then current net asset value per share in one or more offerings, subject to certain limitations set forth in the proxy statement for this Annual Meeting, including, without limitation, that this number of shares issued and sold pursuant to such authority does not exceed 30% of the company's then outstanding common stock immediately prior to each offering. I will refer to this as proposal #2. Proposal #2, as the below-NAV share issuance proposal, during this Annual Meeting. At this meeting, we will first address certain procedural matters and then consider the proposal. Following the conclusion of voting on the proposals, we will adjourn the stockholders' meeting. After the adjournment of the meeting, we may address appropriate questions during the Q&A session. Will the Inspector of Elections please present the report of attendance at this meeting so that we can determine whether a quorum is present.

Mr. Chairman, on March 12, 2021, the record date for this annual meeting, there were outstanding and entitled to vote a total of 65,316,085 shares of common stock. There are 45,882,254 shares of stock represented by proxy or attending this Annual Meeting for approximately 70.2% of all of the shares entitled to vote at this meeting. The shares represent -- shares represented exceed 50% of the total shares entitled to vote at this meeting and thus constitute a quorum

Thank you. Since a quorum is present, this meeting will proceed. It is now 8:36 a.m. on May 20, 2021, and the polls for voting on all matters are open. All Barings BDC stockholders entitled to vote at this meeting have the ability to do so online. If you are a stockholder entitled to vote and have not yet voted or if you wish to change your previously cast vote, please do so via the website used to access this meeting. Please remember that if you've already voted by proxy, it is not necessary to vote again. After voting has been completed on all matters on the agenda, we will close the polls, and the Inspector of Elections will provide the preliminary reported results. We'll move now to a review of the proposals. There are no stockholder nominations or proposals properly filed in accordance with the company's bylaws. Therefore, the business of the meeting is limited to the matters set forth in the notice of annual meeting. The first item on our agenda is proposal #1, the election of 3 Class III Directors, each to serve a 3-year term as set forth in the company's proxy statement and listed on the proxy card. The nominees are David Mihalick, Thomas Okel and Jill Olmsted. Information concerning their principal occupations, service as Barings BDC Board members, skills and qualifications and other matters which may be of interest are contained in the proxy statement. The company did not receive any nominations in accordance with the advanced notice requirements of the bylaws. Therefore, I hereby declare the nominations for the directors closed. Each director nominee requires a majority of the votes cast for his or her election in order to be reelected by the stockholders at this meeting, which means that each director nominee must receive more votes cast for than against him or her. The second item of business on our agenda is the below-NAV share issuance proposal. Under the Investment Company Act, Because more than 50% of the company's outstanding shares of common stock are present or represented by proxy at this meeting, including more than 50% of the outstanding shares [Audio Gap] of both, one, 67% or more of the shares present or represented by proxy at this meeting; and two, 67% or more of the shares present or represented by proxy at this meeting that are not held by affiliated persons of the company. This concludes discussion on all formal matters to be brought before the stockholders. The polls will close shortly. So if you have not yet voted, please do so. [Voting]

Since everyone has had the opportunity to vote, it is now 8:38 a.m. and the polls are closed. The Inspector of Election will now announce the preliminary results. Michael?

On proposal 1, the election of directors, the votes cast for each of the Board's nominees as listed in the proxy statement exceeds the votes cast against each nominee's election. Therefore, each of David Mihalick, Thomas W. Okel and Jill Olmsted, is reelected as a Director of the company for a 3-year term or until the election and qualification of his or her successor. On proposal 2, the below-NAV share issuance proposal, one, 64.78% of the outstanding shares present or represented by proxy at the Annual Meeting and 62.8% of the outstanding shares present or represented by proxy at the annual meeting not held by affiliated persons of the company voted for this proposal. Therefore, the below-NAV share issuance proposal has received the requisite stockholder approval

Thank you. We will file the annual report of the Inspector of Elections with the records of this meeting. We expect to report the results of the voting on a Form 8-K to be filed with the SEC within 4 business days of this meeting. The formal meeting is now completed and adjourned. Ms. Steinnerd, have any relevant questions been received?

No questions have been received at this time.

Thank you. There being no questions to address at this time, on behalf of the Board of Directors, I would like to thank you for attending this meeting and for your continued support of the company. Have a great day.

The meeting has concluded. You may now disconnect.