Barings BDC, Inc.

What the company is

Maryland corporation (incorporated October 10, 2006)
Closed-end, non-diversified investment company
Business development company (BDC) under the Investment Company Act of 1940
Elected to be treated as a regulated investment company (RIC) for federal tax purposes
Headquarters: Charlotte, North Carolina
Began trading on the NYSE as BBDC on August 3, 2018 following an internalization/externalization event

Primary activity: Direct investment in senior secured private debt of middle-market companies
Geography: Primarily U.S.-based middle-market companies, with some investments outside the U.S.
Investment objective: Generate current income by investing directly in privately held middle-market businesses to fund acquisitions, growth, or refinancing
Investment approach:
- Targets senior secured private debt and related structures (first/second lien loans, unitranche structures, revolvers, mezzanine debt)
- May opportunistically pursue equity investments, generally non-control with minority rights
- Emphasizes disciplined underwriting, active portfolio management, and formal risk management processes
Portfolio characteristics:
- Not required to be diversified; may hold more than 5% of total assets or more than 10% of voting securities of a single portfolio company in certain cases
- A substantial portion of investments are below investment grade (or would be if rated)

Adviser: Barings LLC (a MassMutual subsidiary) — responsible for day-to-day investment management and portfolio oversight
Administrator: Barings provides administrative services (facilities, bookkeeping, recordkeeping, fund servicing, and reporting)
Originations and portfolio management are led by Barings Global Private Finance (GPF), supported by Barings’ global teams and investment committees
Barings GPF (as of December 31, 2025): over 120 investment professionals across seven offices in the U.S., Europe, Australia/New Zealand, and Asia
Portfolio managers: Bryan High, Thomas McDonnell, Matthew Freund, Daniel Verwholt
Investment committees: Barings Global Private Finance Investment Committees; Barings Capital Solutions Investment Committee; Barings U.S. High Yield Investment Committee
Co-investment: Uses Barings’ SEC co-investment relief to co-invest with Barings-affiliated funds in Barings-originated loans

Asset Sale (April 2018)
- Sold the December 31, 2017 investment portfolio to BSP Asset Acquisition I, LLC for gross proceeds of $981.2 million (subject to customary adjustments)
Externalization (closing August 2, 2018; NYSE listing August 3, 2018)
- Externalization Agreement with Barings
- Payment to stockholders: $85.0 million (approximately $1.78 per share)
- Barings equity investment: $100.0 million in newly issued common shares at NAV
- Barings commitment: Up to $50.0 million to purchase Barings’ shares in the open market over two years; remaining funds could be used to buy additional shares at NAV or market price
MVC Capital acquisition (completed December 23, 2020)
- Two-step merger structure (MVC Acquisition Sub then merger into Barings BDC)
- Post-merger agreements: Amended and Restated Barings Advisory Agreement (effective January 1, 2021) and MVC Credit Support Agreement (Barings credit support up to $23.0 million for 10 years)
- May 8, 2025: Barings paid $23.0 million to Barings BDC, representing Barings’ maximum obligation under the MVC Credit Support Agreement
Sierra Income Corporation acquisition (completed February 25, 2022)
- Two-step merger with Sierra Income Corporation; Barings provided a second amended and restated advisory agreement and a Sierra Credit Support Agreement (up to $100.0 million)

Valuation policy follows ASC 820 fair value framework
Barings designated to perform fair value determinations for investments lacking readily available market quotes
Pricing sources:
- Independent third-party pricing vendors used where available
- When external pricing is unavailable or inappropriate, Barings applies internal pricing procedures
Valuation levels:
- Level 1: Money market funds and exchange-listed equity
- Level 2: Syndicated senior secured loans and structured products
- Level 3: Middle-market private debt and equity investments
Independent valuation: End-of-quarter independent valuations for non-syndicated middle-market loans and equity investments
Methods used: Synthetic rating analysis, discounted cash flows, re-underwriting; investments may be assigned a valuation range or a point within that range

Asset coverage: Stockholders approved a reduced asset coverage ratio (to 150%) in 2018; asset coverage ratio was 180.7% as of December 31, 2025
Barings GPF maintains a globally distributed team to originate, structure, underwrite, monitor, and manage investments

2018 asset sale gross proceeds: $981.2 million
Externalization cash to stockholders: $85.0 million ($1.78 per share)
Externalization equity investment by Barings: $100.0 million (newly issued shares at NAV)
Barings’ open-market purchase commitment: up to $50.0 million (over two years)
MVC Credit Support Agreement: up to $23.0 million
Sierra Credit Support Agreement: up to $100.0 million
Asset coverage ratio: 180.7% (as of 12/31/2025)
Barings GPF investment professionals: over 120 (as of 12/31/2025)
Barings GPF offices: seven across the U.S., Europe, Australia/New Zealand, and Asia
Typical investment terms for directly originated senior secured private debt: five to seven years; interest generally SOFR plus 450 to 650 basis points per year

Summary

Barings BDC, Inc. is a Maryland-based BDC that seeks current income by directly originating senior secured private debt in middle-market companies, supported by Barings’ institutional private debt platform. The company follows disciplined underwriting and valuation processes and employs active portfolio management. Major corporate events include the 2018 externalization and the MVC and Sierra acquisitions, with related credit support arrangements and recorded asset coverage of 180.7% at year-end 2025.