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- **M&A Surge Continues**: Q3 2025 M&A volumes up 40.9% YoY, with activity expected to persist into 2026 due to private equity dry powder and corporate activity.
- **Investment Momentum Strong**: $470.6M in new commitments, highest since Q4 2021, with 100% first lien loans and 7 lead roles in 13 new deals.
- **Credit Quality Stable**: 1.5% nonaccruals, stable debt metrics, and minimal impact from Dental Brands ($800K exposure).
- **Financial Resilience**: GAAP NII of $0.40 per share, 12.5% annualized yield, and $400M notes issuance at 5.65%.
- **AI Strategy Focused**: Emphasis on mission-critical software companies with a proprietary risk framework to mitigate AI disruption risks.

**【Management Opening Remarks】**
- Q3 2025 M&A volumes surged 40.9% YoY, driven by risk-on sentiment, lower borrowing costs, and clearer market valuations. Base rate cuts are expected to boost deal activity into 2026.
- Adjusted dividend policy to $0.32 base dividend, reducing reliance on special dividends. Emphasis on credit selection in a competitive market.
- AI strategy focuses on mission-critical software companies with a proprietary risk framework. Q3 net investment income per share was $0.40, with a $0.04 special dividend.

**【CEO Commentary】**
- New investment commitments of $470.6M across 27 companies, highest since Q4 2021. 100% of originations in first lien loans, 7 leads in 13 new portfolio companies.
- Notable deals include $1.5B financing for Walgreens' Shields Health Solutions and Newtek Merchant Solutions refinancing.
- Leveraging Goldman Sachs platform to access high-quality opportunities, maintaining selective approach despite market activity.

**【Portfolio and Credit Quality】**
- Total investments at fair value $3.2B (98.2% senior secured loans). $374.4M repayments, 86% from legacy assets, reducing pre-2022 exposure.
- Repurchased 2.1M shares ($25.1M), accretive to NAV. Portfolio yield 10.3%, stable debt metrics (5.8x net debt/EBITDA), 1.5% nonaccruals.

**【CFO Financial Commentary】**
- Total assets $3.8B, debt $1.8B, net assets $1.5B. Net debt/equity 1.17x, below 1.25x target. Issued $400M 5.65% notes hedged to floating.
- GAAP NII $45.3M ($0.40 per share), 12.5% annualized yield. PIK income 8.2%, stable.

**【Q&A Highlights】**
- Sustained M&A activity into 2026 driven by private equity dry powder and corporate strategic deals.
- No expectation of spread widening; platform enables higher spreads via unique originations.
- Dental Brands nonaccrual minimal impact ($800K exposure), stable credit quality with legacy markdowns.

Goldman Sachs BDC (GSBD) Q3 2025 Earnings Call Transcript

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