Barings BDC Targets 1.15x–1.16x Leverage as Fourth Quarter Progresses

Barings BDC Inc. (NYSE: BBDC) expects net leverage to reach about 1.15x–1.16x as the fourth quarter progresses, CEO Thomas McDonnell said Nov. 6, tying the target to likely loan sales and expected repayments.

“As we've stated our target leverage, we look to bring that down probably to the 1.15-1.16 times as we move through the fourth quarter,” McDonnell said.

Fourth-quarter repayments were expected to be roughly flat, and BBDC anticipated likely sales of loans to its Jocassee joint venture. The company made no such sales in the third quarter.

BBDC’s adjusted net debt-to-equity ratio was 1.24x on Sept. 30, up from 1.18x on June 30. That measure is adjusted for unrestricted cash and net unsettled transactions. Gross debt-to-equity was 1.28x. During the third quarter, BBDC funded $196 million in investments and recorded $145.9 million in investments sold or repaid.

BBDC priced its Barings BDC CLO 2026-1 at about $396.3 million on Oct. 30. The deal includes $304 million in rated secured notes sold to investors and $92.3 million in subordinated notes retained by the company. Its floating-rate notes have a weighted average rate of Term SOFR plus 1.64%.

A mid-November closing remained contingent on customary conditions. BBDC plans to combine its net proceeds with borrowings under its senior secured credit agreement to repay in full $350 million of 3.3% notes due Nov. 23, 2026.