Kayne Anderson BDC, Inc.
For the period ended Jun 30, 2025. Filed Aug 11, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 11, 2025
KBDC$12.41-2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0001213900-25-042033
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-11.
0001213900-25-074300
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 76 previous paragraphs and 78 current paragraphs.
56 unchanged; 19 reworded; 2 added; 1 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 35 previous and 37 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
On July 15, 2025, we made an investment in SG Credit Partners, Inc. (along with its affiliates and subsidiaries, “SG Credit”), a national credit platform focused on the lower middle market. The investment is structured as an $80 million term loan facility, a $34 million delayed draw term loan facility and a $12 million common equity investment. The interest rate on the debt investments is 11.00%, and we will own 22.5% of the equity of SG Credit following the investment. In addition, we have an option to purchase additional equity interests of SG Credit at a fixed price.
Current report
On August 8, 2025, we amended our Corporate Credit Facility and increased the total commitment from $400 million to $475 million. There was no change to the interest rates or the maturity date. Amounts available for us to borrow under the Corporate Credit Facility are subject to compliance with a borrowing base that applies different advance rates to different types of assets that are pledged as collateral. These advance rates and customary concentration limits may vary depending on the asset coverage ratio.
Removed paragraphs (1)
Previous report
On May 1, 2025, our Board of Directors authorized an extension of our existing share repurchase program to extend the expiration to May 24, 2026. Under the terms of the program, which are substantially the same as our then existing share repurchase program, we may repurchase up to $100 million of our outstanding common stock in the open market at a price per share that meets certain thresholds below its net asset value per share.
Reworded paragraphs (19)
Previous wording
The Advisor executes on our investment objective by (1) accessing the established loan sourcing channels developed by KAPC, which includes an extensive network of private equity firms, other middle market lenders, financial advisors, intermediaries and management teams, (2) selecting investments within our middle market company focus, (3) implementing KAPC’s underwriting process and (4) drawing upon its experience and resources and the broader Kayne Anderson network. KAPC was established in 2011 and manages (directly and through affiliates) assets under management (“AUM”) of approximately $7.3 billion related to middle market private credit as of March 31, 2025.
Current wording
The Advisor executes on our investment objective by (1) accessing the established loan sourcing channels developed by KAPC, which includes an extensive network of private equity firms, other middle market lenders, financial advisors, intermediaries and management teams, (2) selecting investments within our middle market company focus, (3) implementing KAPC’s underwriting process and (4) drawing upon its experience and resources and the broader Kayne Anderson network. KAPC was established in 2011 and manages (directly and through affiliates) assets under management (“AUM”) of approximately $7.2 billion related to middle market private credit as of June 30, 2025.
Previous wording
On April 15, 2025, we paid a regular dividend of $0.40 per share to each common stockholder of record as of March 31, 2025. The total dividend was $28.5 million and, of this amount, $2.4 million was DRIP which was fulfilled through open market purchases of common stock.
Current wording
On July 16, 2025, we paid a regular dividend of $0.40 per share to each common stockholder of record as of June 30, 2025. The total dividend was $28.3 million and, of this amount, $0.4 million was DRIP which was fulfilled through open market purchases of common stock.
Previous wording
From April 1, 2025 to May 7, 2025, our agent repurchased 393,638 shares of common stock at an average price of $15.54 per share for a total amount of $6.1 million. As of May 7, 2025, $92.0 million remains for repurchase under our initial stock repurchase plan.
Current wording
From July 1, 2025 to August 6, 2025, our agent repurchased 138,014 shares of common stock at an average price of $15.51 per share for a total amount of $2.1 million. As of August 6, 2025, $96.6 million remains for repurchase under our initial stock repurchase plan.
Previous wording
As of March 31, 2025, we had investments in 116 portfolio companies with an aggregate fair value of approximately $2,167 million, and unfunded commitments to these portfolio companies of $236 million, and our portfolio consisted of 98.1% first lien senior secured loans, 0.8% subordinated debt and 1.1% equity investments.
Current wording
As of June 30, 2025, we had investments in 114 portfolio companies with an aggregate fair value of approximately $2,175 million, and unfunded commitments to these portfolio companies of $251 million, and our portfolio consisted of 98.0% first lien senior secured loans, 0.8% subordinated debt and 1.2% equity investments.
Previous wording
As of March 31, 2025, we held investments in broadly syndicated loans in 20 portfolio companies with an aggregate principal amount of $226 million. Our investments in broadly syndicated loans were made in anticipation of the receipt of proceeds from our final capital call and our IPO which closed during the second quarter of 2024. Prior to these investments, we had not held broadly syndicated loans since 2022. Consistent with our strategy at that time, we expect to rotate out of these investments over coming quarters to invest in private middle market loans consistent with our principal strategy. We have presented certain portfolio-related information below for our private middle market loans and broadly syndicated loans separately and on a combined basis for ease of reference.
Current wording
As of June 30, 2025, we held investments in broadly syndicated loans in 16 portfolio companies with an aggregate principal amount of $180 million. Our investments in broadly syndicated loans were made in anticipation of the receipt of proceeds from our final capital call and our IPO which closed during the second quarter of 2024. We expect to rotate out of these investments over coming quarters to invest in private middle market loans consistent with our principal strategy. We have presented certain portfolio-related information below for our private middle market loans and broadly syndicated loans separately and on a combined basis for ease of reference.
Previous wording
As of March 31, 2025, our portfolio was invested across 30 different industries (Global Industry Classification “GICS”, Level 3 – Industry). The largest industries in our portfolio as of March 31, 2025 were Trading Companies & Distributors, Commercial Services & Supplies, Food Products and Containers & Packaging, which represented, as a percentage of our portfolio of long-term investments, 15.4%, 10.8%, 9.2% and 8.7%, respectively, based on fair value. We are generalist investors and the mix of industries represented by our portfolio companies will vary over time.
Current wording
As of June 30, 2025, our portfolio was invested across 30 different industries (Global Industry Classification “GICS”, Level 3 – Industry). The largest industries in our portfolio as of June 30, 2025 were Trading Companies & Distributors, Commercial Services & Supplies, Health Care Providers & Services and Food Products, which represented, as a percentage of our portfolio of long-term investments, 15.5%, 10.8%, 9.5% and 9.0%, respectively, based on fair value. We are generalist investors and the mix of industries represented by our portfolio companies will vary over time.
Previous wording
As of March 31, 2025, our average position size based on commitment of private credit and equity investments (at the portfolio company level) was $23.0 million.
Current wording
As of June 30, 2025, our average position size based on commitment of private credit and equity investments (at the portfolio company level) was $23.3 million.
Previous wording
As of March 31, 2025, we had four debt investments on non-accrual status, which represented 1.6% and 2.3% of total debt investments at fair value and cost, respectively.
Current wording
As of June 30, 2025, we had five debt investments on non-accrual status, which represented 1.6% and 2.6% of total debt investments at fair value and cost, respectively.
Previous wording
For the three months ended March 31, 2025 and 2024, our total investment income was derived from our portfolio of investments.
Current wording
For the three and six months ended June 30, 2025 and 2024, our total investment income was derived from our portfolio of investments.
Previous wording
The following table represents the operating results for the three months ended March 31, 2025 and 2024.
Current wording
The following table represents the operating results for the three and six months ended June 30, 2025 and 2024.
Previous wording
Investment income for the three months ended March 31, 2025 and 2024 totaled $55.2 million and $46.5 million, respectively, and consisted primarily of interest income on our debt investments. For the three months ended March 31, 2025 and 2024, we had $0.3 million and $0.3 million, respectively, of PIK interest included in interest income. As of March 31, 2025, we had four debt investments on non-accrual status. As of March 31, 2024, we had one debt investment on non-accrual status.
Current wording
Investment income for the three and six months ended June 30, 2025 totaled $57.3 million and $112.5 million, respectively, and consisted primarily of interest income on our debt investments. Investment income for the three and six months ended June 30, 2024 totaled $52.4 million and $98.9 million, respectively, and consisted primarily of interest income on our debt investments. For the three and six months ended June 30, 2025, we had $2.1 million and $2.4 million, respectively, of PIK interest included in interest income. For the three and six months ended June 30, 2024 we had $0.4 million and $0.7 million, respectively, of PIK interest included in interest income. As of June 30, 2025, we had five debt investments on non-accrual status. As of June 30, 2024, we had two debt investment on non-accrual status.
Previous wording
Operating expenses for the three months ended March 31, 2025 and 2024 were as follows:
Current wording
Operating expenses for the three and six months ended June 30, 2025 and 2024 were as follows:
Previous wording
During the three months ended March 31, 2025, we had realized gains of $0.6 million on our investments. We had no realized gains or losses during the three months ended March 31, 2024.
Current wording
During the three and six months ended June 30, 2025, we had realized losses of less than $0.1 million and realized gains of $0.6 million, respectively, on our investments. During the three and six months ended June 30, 2024, we had realized losses of $0.1 million, respectively, on our investments.
Previous wording
We fair value our portfolio investments quarterly and any changes in fair value are recorded as unrealized gains or losses. During the three months ended March 31, 2025 and 2024, net unrealized gains (losses) on our investment portfolio were comprised of the following:
Current wording
We fair value our portfolio investments quarterly and any changes in fair value are recorded as unrealized gains or losses. During the three and six months ended June 30, 2025 and 2024, net unrealized gains (losses) on our investment portfolio were comprised of the following:
Previous wording
For the three months ended March 31, 2025, we had a deferred income tax expense of $0.6 million related to our net unrealized gain on our investments in KABDC Corp, LLC, a wholly owned subsidiary, that has elected to be treated as a corporation for U.S. tax purposes. In addition, our net deferred tax liability of $1.3 million is included in accrued expenses and other liabilities of our Consolidated Statement of Assets and Liabilities as of March 31, 2025.
Current wording
For the three and six months ended June 30, 2025, we had a deferred income tax expense of $0.3 million and $0.9 million, respectively, related to our net unrealized gain on our investments in KABDC Corp, LLC, a wholly owned subsidiary, that has elected to be treated as a corporation for U.S. tax purposes. In addition, our net deferred tax liability of $1.6 million is included in accrued expenses and other liabilities of our Consolidated Statement of Assets and Liabilities as of June 30, 2025.
Previous wording
We finance our investments with leverage in the form of borrowings under credit facilities and issuances of senior unsecured notes. We also intend to further borrow under credit facilities and/or issue senior unsecured notes in the future in order to finance our investments. In accordance with the 1940 Act, we are required to meet a coverage ratio of total assets (less total liabilities other than indebtedness) to total borrowings and other senior securities (and any preferred stock that we may issue in the future) of at least 150%. If this ratio declines below 150%, we cannot incur additional leverage and could be required to sell a portion of our investments to repay some leverage when it is disadvantageous to do so. As of March 31, 2025 and December 31, 2024, our asset coverage ratios were 216% and 238%, respectively. We currently intend to target asset coverage of 200% to 180% (which equates to a debt-to-equity ratio of 1.0x to 1.25x) but may alter this target based on market conditions.
Current wording
We finance our investments with leverage in the form of borrowings under credit facilities and issuances of senior unsecured notes. We also intend to further borrow under credit facilities and/or issue senior unsecured notes in the future in order to finance our investments. In accordance with the 1940 Act, we are required to meet a coverage ratio of total assets (less total liabilities other than indebtedness) to total borrowings and other senior securities (and any preferred stock that we may issue in the future) of at least 150%. If this ratio declines below 150%, we cannot incur additional leverage and could be required to sell a portion of our investments to repay some leverage when it is disadvantageous to do so. As of June 30, 2025 and December 31, 2024, our asset coverage ratios were 210% and 238%, respectively. We currently intend to target asset coverage of 200% to 180% (which equates to a debt-to-equity ratio of 1.0x to 1.25x) but may alter this target based on market conditions.
Previous wording
As of March 31, 2025, we had $75 million Notes outstanding, $940.5 million borrowed under our credit facilities and cash and cash equivalents of $46 million (including investments in money market funds). As of that date, we had $384.5 million of undrawn commitments available on our credit facilities (subject to borrowing base restrictions and other conditions). As of May 7, 2025, we had $75 million Notes outstanding, $944 million borrowed under our credit facilities and cash and cash equivalents of $12.5 million (including investments in money market funds).
Current wording
As of June 30, 2025, we had $75 million Notes outstanding, $979 million borrowed under our credit facilities and cash and cash equivalents of $44.4 million (including investments in money market funds). As of that date, we had $346 million of undrawn commitments available on our credit facilities (subject to borrowing base restrictions and other conditions). As of August 6, 2025, we had $75 million Notes outstanding, $1,029 million borrowed under our credit facilities and cash and cash equivalents of $21.6 million (including investments in money market funds).
Previous wording
As of March 31, 2025 and December 31, 2024, we had an aggregate $235.5 million and $186.3 million, respectively, of unfunded commitments, including $150.6 million and $126.7 million, respectively, of unfunded commitments on revolvers, to provide debt financing to our portfolio companies. Such commitments are generally subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in our financial statements. Other than contractual commitments and other legal contingencies incurred in the normal course of our business, we do not have any other off-balance sheet financings or liabilities.
Current wording
As of June 30, 2025 and December 31, 2024, we had an aggregate $250.8 million and $186.3 million, respectively, of unfunded commitments, including $162.2 million and $126.7 million, respectively, of unfunded commitments on revolvers, to provide debt financing to our portfolio companies. Such commitments are generally subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in our financial statements. Other than contractual commitments and other legal contingencies incurred in the normal course of our business, we do not have any other off-balance sheet financings or liabilities.
Previous wording
The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies, including those relating to the valuation of our investment portfolio, are described below. The critical accounting policies should be read in conjunction with our risk factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in this Quarterly Report. See Note 2 to our consolidated financial statements for the three months ended March 31, 2025, for more information on our critical accounting policies.
Current wording
The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies, including those relating to the valuation of our investment portfolio, are described below. The critical accounting policies should be read in conjunction with our risk factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in this Quarterly Report. See Note 2 to our consolidated financial statements for the six months ended June 30, 2025, for more information on our critical accounting policies.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For the six-month periods ended June 30, 2025 and 2024, the top five largest contributors to the change in unrealized gains and the top five largest contributors to the change in unrealized losses on investments, and the remaining unrealized gains and losses from other portfolio companies, are presented in the following tables.