Kayne Anderson BDC Sets Leverage Target, Increases Private Credit Exposure

Kayne Anderson BDC targets 1x-1.25x leverage and increased private credit exposure, while scaling back syndicated loans. The BDC reported stable net investment income of $0.40 per share and net income of $0.35 per share in Q2 2025, representing a 9.8% annual return on equity. Management highlighted solid second-quarter results and a regular dividend.

Kayne Anderson BDC, Inc. (NYSE: KBDC) announced its financial results for the second quarter ended June 30, 2025, highlighting stable net investment income and a focus on increasing private credit exposure while scaling back syndicated loans. The company reported net investment income of $28.7 million, or $0.40 per share, and net income of $0.35 per share for the quarter, representing a 9.8% annual return on equity [1].

The company's net asset value per share decreased to $16.37 from $16.51 as of March 31, 2025, primarily due to 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. Management emphasized the strength of the company's platform, noting a 540 basis points spread over SOFR for new investments and a portfolio of 98% first lien loans with non-accruals flat at 1.6% of fair value [1].

Kayne Anderson BDC also reported new private credit and equity co-investment commitments of $128.7 million, 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. The company's debt-to-equity ratio was 0.91x, and it targets a debt-to-equity ratio of 1.0x to 1.25x, aiming to achieve the low end of its targeted leverage in the third quarter of 2025 [1].

Management also highlighted the company's strategic investment in SG Credit Partners, Inc., a national credit platform focused on the lower middle market. The investment, structured as an $80 million term loan facility, a $34 million delayed draw term loan facility, and a $12 million common equity investment, is expected to complement the company's direct lending portfolio and origination platform while being immediately accretive to shareholders [1].

The company's Board of Directors declared a regular dividend of $0.40 per share, to be paid on October 16, 2025, to stockholders of record as of September 30, 2025. The company will host a conference call on August 12, 2025, to review its financial results [1].

References:
[1] https://www.marketscreener.com/news/kayne-anderson-bdc-inc-announces-june-30-2025-financial-results-and-declares-third-quarter-2025-d-ce7c5ed3d88bf527