[Management View]
Net Investment Income (NII) was $0.45 per share, producing an annualized yield on book value of 10.3%, exceeding the regular quarterly dividend by 7%. Earnings Per Share (EPS) were $0.29, reflecting an annualized return on book value of 6.6%. Net Asset Value (NAV) per share was $17.40, down $0.16 from the prior quarter, primarily due to a single loan markdown. The Board declared a fourth-quarter dividend of $0.42 per share, with an additional $0.03 per share, totaling $0.45 per share, representing a 10.3% annualized rate on ending book value.

[Outlook]
Management emphasized confidence in maintaining the regular $0.42 quarterly dividend, citing several earnings levers such as joint venture and asset-based lending investments, higher prepayment-related income, and targeted investment in the core middle market. They believe the company is well-positioned to continue driving attractive results, supported by spillover income and historical credit discipline.

[Financial Performance]
- Net Investment Income (NII): $0.45 per share
- Earnings Per Share (EPS): $0.29
- Net Asset Value (NAV) per share: $17.40
- Gross Originations: $340 million
- Portfolio Composition: $2.5 billion at fair value across 195 companies
- Weighted Average Yield: 11.1% at amortized cost, 11.2% at fair value
- Non-accruals: 1.5% by amortized cost, 0.7% by fair value
- Total expenses before taxes: $37.2 million
- Net leverage ratio: 1.23 times
- Liquidity: $570 million

[Q&A Highlights]
Question 1: Can you talk about the push for more spreads, leverage, and off-balance sheet leverage, and how that impacts risk and expected loss rates?
Answer: We focus on maintaining an on-balance sheet leverage ratio between 1 and 1.25 times. Our joint ventures use leverage prudently, with ISLP levered about 0.8 times and SLP slightly higher. Diversification across almost 200 companies helps mitigate the impact of any individual loss on overall performance.

Question 2: There was a small write-down on some aircraft this quarter. Can you explain the reason and future plans for the aircraft portfolio?
Answer: The write-down reflects potential exit valuation rather than underwriting quality. We view underwriting hard assets as a differentiator and will continue to find new investments in the asset-backed market, though we do not expect significant growth in this segment.

Question 3: NII earnings without the look-back would be lower. How do you plan to cover the dividend given the expected increase in debt refinancing costs?
Answer: We have several earnings levers, including higher earnings from joint ventures and ABL investments, increased prepayment-related income, and leveraging our private credit platform. We also have a cushion from spillover income, which provides additional support.

Question 4: Is there potential to improve financing within joint ventures and CLOs?
Answer: We are continuously discussing with banking partners to optimize financing spreads. We have already refinanced debt at tighter spreads in some joint ventures, and we will continue to explore opportunities for improvement.

Question 5: Are you currently seeing opportunities for junior capital investments?
Answer: Junior capital is part of our private credit group's expertise. We are cautious about taking on more risk but see opportunities in today's market where base rates remain elevated. We will continue to find interesting opportunities in this area.

[Sentiment Analysis]
Analysts were generally positive, focusing on the company's ability to maintain dividend coverage and manage leverage. Management expressed confidence in their earnings levers and credit discipline, emphasizing portfolio diversification and prudent risk management.

[Quarterly Comparison]
| Metric | Q3 2025 | Q2 2025 |
|-------------------------------|---------------|---------------|
| Net Investment Income (NII) | $0.45 per share | $0.47 per share |
| Earnings Per Share (EPS) | $0.29 | $0.47 |
| Net Asset Value (NAV) | $17.40 | $17.56 |
| Weighted Average Yield | 11.1% (amortized cost) | 11.4% (amortized cost) |
| Non-accruals (amortized cost) | 1.5% | 1.7% |
| Total Expenses | $37.2 million | $39.3 million |
| Net Leverage Ratio | 1.23 times | 1.2 times |
| Liquidity | $570 million | N/A |

[Risks and Concerns]
- Potential headwinds from a lower rate environment and debt refinancing in 2026.
- Exposure to idiosyncratic losses within the portfolio.
- Managing leverage and maintaining dividend coverage amidst market fluctuations.

[Final Takeaway]
Bain Capital Specialty Finance delivered solid Q3 2025 results, with strong net investment income and a well-diversified portfolio. Management remains confident in maintaining dividend coverage through various earnings levers and prudent risk management. The company's focus on the core middle market and asset-backed investments positions it well for future growth, despite potential headwinds from a lower rate environment and debt refinancing.