Previous Statements by GBDC
» Golub Capital BDC's CEO Discusses F1Q 2012 Results - Earnings Call Transcript
» Golub Capital BDC CEO Discusses F3Q11 Results - Earnings Call Transcript
» Golub Capital's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» Golub Capital CEO Discusses F1Q2011 Results - Earnings Call Transcript
I would like now to turn the call over to Mr. David Golub, Chief Executive Officer of Golub Capital BDC. Please go ahead sir.David Golub Thank you, operator and good morning to everyone, thank you for joining us today. I am joined today by Ross Teune, our Chief Financial Officer. I hope you’ve been able to review our earnings release and investor presentation which we posted on the website. We’ll be referring to this presentation throughout today’s call. I’d like to start today by providing an overview of the December 31, 2011 quarterly financial results. Ross is then going to come back and take us through the quarterly results in more detail. And then I’m going to return and provide some commentary on our recent stock offering and provide also some summary of some recent regulatory matters. With that let’s get started. As I highlighted on page one of the investor presentation, net investment income for the quarter ended December 31, 2011 was $6.3 million or $0.29 a share, as compared to $6.5 million or $0.30 a share for the quarter ended September 30. Net investment income including the net spread payments of $700,000 generated from the total return swap was $0.32 a share for the quarter. We’ve included this additional non-GAAP measure which includes the net spread payments from the total return swap as we view the net spread payments from the total return swap is recurring source of private liquidity to pay dividends for investors. Net increase in net assets resulting from operations for the quarter ended December 31 was $6.2 million or $0.28 a share, as compared to $3 million or $0.14 a share for the quarter ended September 30. If we look at the combination of net realized and unrealized loss on investments on derivatives for the quarter, it was negative $200,000, a loss of $200,000 or $0.01 a share for the quarter. I am going to suggest when we talk about this, that we combine both realized and unrealized and combine the sum of those two into three categories to help explain where we got the negative $200,000 it’s a little bit confusing otherwise.
Let’s first look at the total return swap, net realized and unrealized gains return swap were plus $2.1 million, and that’s comprising two pieces, a $1.5 of unrealized gains that was primarily result of rally in broadly syndicated loan prices of the loans that were referenced in the total return swap. And in addition to the $1.5 million, there was also an increase in net interest accrued on total return swap of $600,000 for the quarter. So total of $2.1 million consisting of two pieces.Now let’s talk about the second component of net realized and unrealized which is huge investments in loans and equity securities. Here we have a bad guy and that is $1.8 million. Loss of $1.8 million that was comprised of $2.1 million of realized losses on the sale of a non-earning asset in that, $2.5 million on unrealized depreciation because we actually sold that position for more than carrying value. And we also had $2.2 million of unrealized depreciation, principally the result of a write-down on one new non-earning asset. The final piece of net realized and unrealized relates to our futures hedge. If you recall last quarter, I mentioned that we in connection with drawing down debentures under the SBIC program, we currently have temporary borrowing under that program, it will get fixed in the SBA’s next ruling date is in March. So to eliminate interest rate risk on those temporary securities, we entered into a futures hedge. And the futures hedge with a quarter ended December 31 at a $500,000 mark-to-market loss on it. That was comprised of $400,000 of losses on the settlement of one futures contract and unrealized loss of a $100,000 on a new contract that we rolled into at year-end. Read the rest of this transcript for free on seekingalpha.com