Kayne Anderson BDC, Inc. 10-K

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Price Range of Common Stock Our common stock commenced trading on the NYSE under the symbol “KBDC” on May 22, 2024. Prior to our IPO, the shares of our common stock were offered and sold in transactions exempt from registration under the Securities Act. As such there was no public market for shares of our common stock prior to May 22, 2024. The following table sets forth, for each fiscal quarter since our common stock commenced trading on the NYSE, (i) the NAV per share of our common stock as of the applicable period end, (ii) the range of high and low closing sales prices of our common stock as reported on the NYSE during the applicable period, and (iii) the closing high and low sales prices as a premium (discount) to NAV during the relevant period. Closing Sales Price (2) Premium (Discount) of High Sales Price to Premium (Discount) of Low Sales Price to NAV (1) High Low NAV (3) NAV (3) Year Ending December 31, 2024 $ 16.70 $ 17.00 $ 15.85 1.8 % (5.1 )% Third Quarter $ 16.70 $ 16.40 $ 15.70 (1.8 )% (6.0 )% Second Quarter (from May 22, 2024 through June 30, 2024) $ 16.57 $ 16.55 $ 15.95 (0.1 )% (3.7 )% (1) NAV per share is determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the date of the high and low sales prices. The NAVs shown are based on outstanding shares at the end of each period. (2) Closing sales price as provided by the NYSE. (3) Calculated as of the respective high or low closing sales price divided by the quarter end NAV and subtracting 1. On February 21, 2025, the reported closing sales price of our common stock was $17.40 per share. Holders Please see “Part III—Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” for disclosure regarding the holders. As of February 21, 2025, we had 504 holders of record of our common stock, which did not include stockholders for whom shares are held in “nominee” or “street name”. 58 Distributions The following table reflects the distributions declared and payable for the year ended December 31, 2024 (dollars in thousands, except per share amounts). Dividend Total Date Declared Record Date Payment Date per Share Dividend March 6, 2024 March 29, 2024 April 17, 2024 $ 0.40 $ 19,516 May 8, 2024 June 28, 2024 July 15, 2024 0.40 28,447 August 7, 2024 September 30, 2024 October 15, 2024 0.40 28,419 May 8, 2024 December 5, 2024 December 20, 2024 0.10 7,102 November 6, 2024 December 31, 2024 January 15, 2025 0.40 28,424 $ 1.70 $ 111,908 Dividend Reinvestment Plan The following table summarizes the amounts received and shares of common stock issued to shareholders pursuant to our dividend reinvestment plan during the year ended December 31, 2024 (dollars in thousands, except per share amounts). Dividend Dividend DRIP record payment shares DRIP date date issued value December 29, 2023 January 16, 2024 95,791 $ 1,573 March 29, 2024 April 17, 2024 94,816 1,577 June 28, 2024 July 15, 2024 - - September 30, 2024 October 15, 2024 - - December 5, 2024 December 20, 2024 37,843 632 228,450 $ 3,782 All of the dividends declared during the year ended December 31, 2024 were derived from ordinary income, determined on a tax basis. Recent Sales of Unregistered Securities As set forth in the table below (dollars in thousands, except per share amounts), during the year ended December 31, 2024, we issued and sold 23,322,186 shares of common stock at an aggregate offering amount of approximately $388,634. The issuance of the shares of common stock was exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) and Rule 506(b) of Regulation D thereof and previously reported by us on our current reports on Form 8-K. The Company relied, in part, upon representations from the investors in the subscription agreements that each investor was an accredited investor as defined in Regulation D under the Securities Act. 59 Common stock issue date Offering price per share Common stock shares issued Aggregate offering amount February 14, 2024 $ 16.74 7,089,771 $ 118,689 April 2, 2024 $ 16.63 16,232,415 269,945 Total common stock issued 23,322,186 $ 388,634 Stock Repurchase Plan (dollars in thousands, except share amounts) On May 21, 2024, the Company entered into a share repurchase plan, or the Company 10b5-1 Plan, to acquire up to $100,000 in the aggregate of the Company’s Common Stock at prices below the Company’s net asset value per share over a specified period, in accordance with the guidelines specified in Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company 10b5-1 Plan was approved by the Board of Directors on March 6, 2024. The Company 10b5-1 Plan requires Morgan Stanley Corporation as the Company’s agent, to repurchase Common Stock on its behalf when the market price per share is below the most recently reported net asset value per share (including any updates, corrections or adjustments publicly announced by the Company to any previously announced net asset value per share, including any distributions declared). Under the Company 10b5-1 Plan, the volume of purchases would be expected to increase as the price of the Company’s Common Stock declines, subject to volume restrictions. The timing and amount of any share repurchases will depend on the terms and conditions of the Company 10b5-1 Plan, the market price of the Company’s Common Stock and trading volumes, and no assurance can be given that Common Stock be repurchased in any particular amount or at all. The repurchase of shares pursuant to the Company 10b5-1 Plan is intended to satisfy the conditions of Rule 10b5-1 and Rule 10b-18 under the Exchange Act, and will otherwise be subject to applicable law, including Regulation M, which may prohibit repurchases under certain circumstances. The Company 10b5-1 Plan commenced beginning 60 calendar days following the end of the “restricted period” under Regulation M and will terminate upon the earliest to occur of (i) the close of business on May 24, 2025, (ii) the end of the trading day on which the aggregate purchase price for all shares purchased under the Company 10b5-1 Plan equals $100,000 and (iii) the occurrence of certain other events described in the Company 10b5-1 Plan. The “restricted period” under Regulation M ended upon the closing of the Company’s IPO and, therefore, the Common Stock repurchases/purchases described above began on July 23, 2024. During the year ended December 31, 2024, the Company repurchase 94,613 shares under the Company’s 10b5-1 Plan for a total of $1,525. Stock Performance Graph This graph compares the stockholder return on our common stock from May 22, 2024 (the first date that our common stock began trading on the NYSE) to December 31, 2024 with that of the Standard & Poor’s 500 Stock Index and the Standard & Poor’s BDC Index. This graph assumes that on May 22, 2024, $100 was invested in our common stock, the Standard & Poor’s 500 Stock Index and the Standard & Poor’s BDC Index. The graph also assumes the reinvestment of all cash distributions prior to any tax effect. The graph and other information furnished under this Part II Item 5 of this annual report on Form 10-K shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under, or to the liabilities of Section 18 of, the Exchange Act. The stock price performance included in the below graph is not necessarily indicative of future stock performance. COMPARISON OF CUMULATIVE TOTAL RETURN AMONG KAYNE ANDERSON BDC, INC. S&P 500 INDEX AND S&P BDC INDEX Total Return Performance 60 Fees and Expenses The following table is being provided to update, as of December 31, 2024, certain information in our registration statement on Form N-2 (File No. 333-283316) that was filed on January 29, 2025. The following table is intended to assist you in understanding the costs and expenses that an investor in shares of our common stock will bear directly or indirectly. We caution you that some of the percentages indicated in the table below are estimates and may vary. The expenses shown in the table under “Annual Expenses” assume a debt-to-equity ratio of 1.00x (which equates to asset coverage of 200%). The following table should not be considered a representation of our future expenses. Actual expenses may be greater or less than shown. Stockholder Transaction Expenses : Sales Load (as a percentage of offering price) (1) — Offering expenses (as a percentage of offering price) (2) — Dividend Reinvestment Plan Fees (3) $ 15.00 Total Stockholder Transaction Expenses (as a percentage of offering price) — Annual Expenses (as a percentage of net assets attributable to common stock) (4) Management Fees (5) 2.00 % Incentive Fees (6) 1.73 % Interest Payments and fees paid on Borrowed Funds (7) 7.28 % Other Expenses (8) 0.38 % Total Annual Expenses 11.39 % (1) In the event that the securities to which any applicable prospectus relates are sold or through underwriters or agents, a corresponding prospectus supplement will disclose the applicable sales load (underwriting discount and commission). (2) Any related prospectus supplement will disclose the estimated amount of offering expenses, the offering price and the estimated amount of offering expenses borne by us as a percentage of the offering price. (3) Participants in the dividend reinvestment plan may withdraw at any time by giving notice to the DRIP administrator. There is no brokerage charge for reinvestment of dividends or distributions in common stock. However, all participants will pay a pro rata share of brokerage commissions incurred by the DRIP administrator when it makes open market purchases. If a DRIP participant elects to have the DRIP Administrator sell its shares in connection with a withdrawal from the DRIP, the DRIP administrator is authorized to deduct a $15 transaction fee plus a $0.10 per share brokerage commission from the proceeds. The expenses of the dividend reinvestment plan are included in “other expenses” in the table above. Our common stockholders will ultimately bear indirectly the DRIP administrator’s fees. For additional information, see “ Dividend Reinvestment Plan .” (4) Net assets employed as the denominator for expense ratio computation is $1,186 million. (5) Includes management fees paid by Kayne Anderson BDC Financing, LLC (“KABDCF”) and Kayne Anderson BDC Financing II, LLC (“KABDCF II”), respectively. The base management fee is calculated at an annual rate of 1.00% of the fair market value of our investments including, in each case, assets purchased with borrowings under credit facilities and issuances of senior unsecured notes, but excluding cash, U.S. government securities and commercial paper instruments maturing within one year of purchase. 61 (6) The Incentive Fee will consist of two components that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the Incentive Fee is based on our income and a portion is based on our capital gains. The table reflects each incentive fee calculated at a rate of 15.0%. (7) Interest payments on borrowed funds represents an estimate of our annualized interest expense based on borrowings under credit facilities and issuances of senior unsecured notes. The assumed weighted average interest rate outstanding under our credit facilities and senior unsecured notes was 7.28%. We intend to further borrow under credit facilities and/or issue senior unsecured notes in the future in order to finance our investments and may issue preferred stock, subject to our compliance with applicable requirements under the 1940 Act. (8) “Other Expenses” includes estimated general and administrative expenses, professional fees and director fees and is based on amounts estimated for the current fiscal year. Includes expenses paid by KABDCF and KABCF II, respectively. Example The following example demonstrates the projected dollar amount of total cumulative expenses over various periods with respect to a hypothetical investment in our shares of common stock. In calculating the following expense amounts, we have assumed that our annual operating expenses would remain at the levels set forth in the table above. Transaction expenses are excluded from the table below . In the event that the securities to which any applicable prospectus relates are sold to or through underwriters or agents, a corresponding prospectus supplement will disclose any transaction expenses. 1 Year 3 Years 5 Years 10 Years You would pay the following expenses on a $1,000 investment, assuming a 5% annual return resulting entirely from net realized capital gains (1) $ 110 $ 310 $ 485 $ 834 You would pay the following expenses on a $1,000 investment, assuming a 5% annual return resulting entirely from net investment income (2) $ 94 $ 270 $ 430 $ 768 (1) Assumes no unrealized capital depreciation or realized capital losses and 5% annual return on our portfolio resulting entirely from net realized capital gains (and therefore subject to the capital gains incentive fee). Because our investment strategy involves investments that primarily generate current income, we believe that a 5% annual return resulting from realized capital gains is unlikely. (2) The income based incentive fee is subject to a 6.00% hurdle. Accordingly, no incentive fee would be payable in this example. While the example assumes, as required by the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. There is no incentive compensation either on income or on capital gains under our Investment Advisory Agreement assuming a 5% annual return and therefore it is not included in the example. If we achieve sufficient returns on our investments, including through the realization of capital gains, to trigger an incentive compensation of a material amount, our distributions to our stockholders and our expenses would likely be higher. In addition, while the example assumes reinvestment of all dividends and distributions at NAV, under certain circumstances, reinvestment of dividends and other distributions under our dividend reinvestment plan may occur at a price per share that differs from NAV. See “Dividend Reinvestment Plan” for additional information regarding our DRIP. 62 Senior Securities Information about the Company’s senior securities is shown as of the dates indicated in the below table. The report of our independent registered public accounting firm, PricewaterhouseCoopers LLP, as of December 31, 2024, is included within “Item 8. Consolidated Financial Statements and Supplementary Data.” Class and Period Total Amount Outstanding Exclusive of Treasury Securities (1) ($ in millions) Asset Coverage per Unit (2) ($ in millions) Involuntary Liquidating Preference per Unit (3) Average Market Value per Unit (4) Corporate Credit Facility December 31, 2024 $ 250 $ 2,380 — N/A September 30, 2024 (unaudited) $ 221 $ 2,510 — N/A June 30, 2024 (unaudited) $ 75 $ 2,890 — N/A March 31, 2024 (unaudited) $ 198 $ 2,230 — N/A December 31, 2023 $ 234 $ 1,980 — N/A September 30, 2023 (unaudited) $ 192 $ 2,140 — N/A June 30, 2023 (unaudited) $ 237 $ 2,010 — N/A December 31, 2022 $ 269 $ 2,030 — N/A December 31, 2021 — — — N/A Revolving Funding Facility December 31, 2024 $ 420 $ 2,380 — N/A September 30, 2024 (unaudited) $ 409 $ 2,510 — N/A June 30, 2024 (unaudited) $ 389 $ 2,890 — N/A March 31, 2024 (unaudited) $ 319 $ 2,230 — N/A December 31, 2023 $ 306 $ 1,980 — N/A September 30, 2023 (unaudited) $ 306 $ 2,140 — N/A June 30, 2023 (unaudited) $ 320 $ 2,010 — N/A December 31, 2022 $ 200 $ 2,030 — N/A December 31, 2021 — — — N/A Revolving Funding Facility II (5) December 31, 2024 $ 113 $ 2,380 — N/A September 30, 2024 (unaudited) $ 83 $ 2,510 — N/A June 30, 2024 (unaudited) $ 83 $ 2,890 — N/A March 31, 2024 (unaudited) $ 67 $ 2,230 — N/A December 31, 2023 $ 70 $ 1,980 — N/A September 30, 2023 (unaudited) — — — N/A June 30, 2023 (unaudited) — — — N/A December 31, 2022 — — — N/A December 31, 2021 — — — N/A 63 Class and Period Total Amount Outstanding (1) ($ in millions) Asset Coverage per Unit (2) ($ in millions) Involuntary Liquidating Preference per Unit (3) Average Market Value per Unit (4) Subscription Credit Agreement (6) December 31, 2024 — — — N/A September 30, 2024 (unaudited) — — — N/A June 30, 2024 (unaudited) — — — N/A March 31, 2024 (unaudited) — — — N/A December 31, 2023 $ 10.8 $ 1,980 — N/A September 30, 2023 (unaudited) $ 25 $ 2,140 — N/A June 30, 2023 (unaudited) $ 9 $ 2,010 — N/A December 31, 2022 $ 108 $ 2,030 — N/A December 31, 2021 $ 105 $ 2,170 — N/A Loan and Security Agreement (LSA) (7) December 31, 2024 — — — N/A September 30, 2024 (unaudited) — — — N/A June 30, 2024 (unaudited) — — — N/A March 31, 2024 (unaudited) — — — N/A December 31, 2023 — — — N/A September 30, 2023 (unaudited) — — — N/A June 30, 2023 (unaudited) — — — N/A December 31, 2022 — — — N/A December 31, 2021 $ 162 $ 2,170 — N/A Notes December 31, 2024 $ 75 $ 2,380 — N/A September 30, 2024 (unaudited) $ 75 $ 2,510 — N/A June 30, 2024 (unaudited) $ 75 $ 2,890 — N/A March 31, 2024 (unaudited) $ 75 $ 2,230 — N/A December 31, 2023 $ 75 $ 1,980 — N/A September 30, 2023 (unaudited) $ 75 $ 2,140 — N/A June 30, 2023 (unaudited) $ 75 $ 2,010 — N/A December 31, 2022 — — — N/A December 31, 2021 — — — N/A (1) Total amount of senior securities outstanding at the end of the period presented. (2) Asset coverage per unit is the ratio of the carrying value of our total assets, less all liabilities excluding indebtedness represented by senior securities in this table, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness and is calculated on a consolidated basis. (3) The amount to which such class of senior security would be entitled upon our involuntary liquidation in preference to any security junior to it. (4) Not applicable because the senior securities are not registered for public trading. (5) The Revolving Funding Facility II was entered into on December 22, 2023. (6) The Subscription Credit Agreement was terminated on April 1, 2024. (7) The Loan and Security Agreement (“LSA”) was terminated on February 18, 2022. 64 ITEM 6. [RESERVED] The selected financial data previously required by Item 301 of Regulation S-K has been omitted in reliance on SEC Release No. 33-10890, Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information.