Kayne Anderson BDC: The Safest First-Lien Dividend in the Business

Kayne Anderson BDC's (NYSE:KBDC) low leverage and stable income stream make it a top pick for investors seeking a secure dividend. The company's first-lien debt portfolio provides a strong foundation for its dividend payments. With a proven track record and a conservative approach, KBDC is a reliable choice for those seeking dividend safety and stability.

Kayne Anderson BDC, Inc. (NYSE: KBDC), a business development company, has reported its financial results for the second quarter ended June 30, 2025. The company's strong performance, characterized by a stable income stream and low leverage, makes it an attractive choice for investors seeking secure dividends.

Financial Highlights

The company reported net investment income of $28.7 million, or $0.40 per share, in the second quarter. This income covered the regular quarterly dividend of $0.40 per share, demonstrating the company's ability to generate sufficient income to support its dividend payments [1].

Kayne Anderson BDC's net asset value per share decreased to $16.37 from $16.51 as of March 31, 2025. This decrease was primarily due to the payment of a special dividend of $0.10 per share and net unrealized losses on the portfolio of $0.06, partially offset by accretion from share repurchases [1].

The company's debt-to-equity ratio was 0.91x as of June 30, 2025, indicating a conservative financial position. The company targets a debt-to-equity ratio of 1.0x to 1.25x, and it is currently below this target but expects to grow its private credit portfolio to achieve the low end of its targeted leverage in the third quarter of 2025 [1].

Investment Activity and Portfolio

Kayne Anderson BDC's investment portfolio, at fair value, stood at $2,174,640 as of June 30, 2025. The company's private credit and equity co-investment commitments totaled $128.7 million, with fundings of $128.7 million and sales and repayments of $72.1 million, resulting in a net funded private credit and equity investment increase of $56.6 million [1].

The company's portfolio consists of 98% first lien loans, providing a strong foundation for its dividend payments. Non-accrual debt investments accounted for 1.6% of the debt investments at fair value, indicating a healthy portfolio with minimal delinquencies [1].

Recent Developments

Kayne Anderson BDC has made strategic investments, including a $80 million term loan facility, a $34 million delayed draw term loan facility, and a $12 million common equity investment in SG Credit Partners, Inc. This investment is expected to complement the company's direct lending portfolio and origination platform while being immediately accretive to shareholders [1].

Conclusion

Kayne Anderson BDC's stable income stream, low leverage, and conservative investment portfolio make it a reliable choice for investors seeking secure dividends. With a proven track record and a focus on first-lien debt investments, the company offers a stable and predictable income stream for shareholders.

References

[1] https://www.businesswire.com/news/home/20250811780032/en/Kayne-Anderson-BDC-Inc.-Announces-June-30-2025-Financial-Results-and-Declares-Third-Quarter-2025-Dividend-of-%240.40-Per-Share