KBRA Affirms Ratings for Goldman Sachs BDC, Inc.

KBRA affirms the issuer and senior unsecured debt ratings of BBB for Goldman Sachs BDC, Inc. (NYSE: GSBD or "the company"). The rating Outlook is Stable.

Key Credit Considerations

The ratings and Outlook are supported by Goldman Sachs BDC, Inc.'s ties to Goldman Sachs' ("GS") $3.45 trillion of assets under supervision, including $82 billion of senior direct lending AUM along with SEC exemptive relief to co-invest with GS affiliates. GS provides the company with robust deal sourcing, research, a large sponsor network, and strong banking relationships. Additionally, the company has a solid management team, which has a long track record working with the private debt markets with each member of senior management having 22+ years of experience in the industry. Also, the ratings are supported by GSBD’s $3.2 billion well-diversified investment portfolio comprised largely of senior secured first lien loans (~96.7%) to 171 portfolio companies across 41 sectors with a median portfolio company EBITDA of ~$70.85 million as of September 30, 2025. GSBD focuses primarily on middle-market companies in the U.S. that are private equity sponsored or often non-sponsored family-run businesses that provide significant equity cushion with low LTVs. The weighted average leverage was 5.8x and interest coverage of 1.9x, using a “current quarter” calculation. As of September 30, 2025, the top three portfolio sectors were Software (18.9%), Health Care Technology (9.9%), and Health Care Providers & Services (9.0%). Further supporting the rating is GSBD's diversified funding profile consisting of $1.3 billion of senior unsecured notes and a $1.7 billion revolving credit facility with 15 lenders as part of the syndicate as of September 30, 2025. Liquidity remains solid with $1.14 billion in available bank credit and $148.4 million in cash and cash equivalents set against $900 million of unsecured notes coming due in the next two years and unfunded commitments of ~$636 million. As of September 30, 2025, the company’s percentage of unsecured senior debt to total debt outstanding was a solid ~70.2%, providing solid financial flexibility and sound unencumbered assets for the benefit of unsecured noteholders, in KBRA’s view. Gross leverage was moderate at 1.27x, well within regulatory coverage of 2:1 and comparable to peers. The company’s asset coverage was 178%, leaving a solid cushion to allow for market volatility in less favorable markets.

GSBD has historically maintained somewhat elevated non-accruals compared to peers. As of September 30, 2025, GSBD had eight portfolio companies on non-accrual, with non-accrual investments as a percentage of total investments at cost and fair value totaling 2.5% and 1.5%, respectively. Investments on non-accrual as a percentage of total investments has been trending down with exits and restructurings. Further counterbalancing the company's strengths are the potential risk related to the company’s illiquid investments, retained earnings constraints as a Regulated Investment Company (RIC), and a more uncertain economic environment with high interest rates, geopolitical risks, and the potential of increasing non-accruals.

GSBD is an externally managed, closed-end, non-diversified investment management company that elected to be treated as a Business Development Company (BDC) under the 1940 Act and as a RIC, which, among other things, must distribute to its shareholders at least 90% of the company’s investment company taxable income. The company is formed as a Delaware limited liability company. The company is managed by Goldman Sachs Asset Management, L.P. ("GSAM"), an affiliate of Goldman Sachs & Co. LLC. GSBD's affiliate BDC, Goldman Sachs Private Credit Corp., is rated by KBRA (Issuer and Senior Unsecured Debt Ratings: BBB/Stable Outlook).

Rating Sensitivities

Positive rating momentum or an Outlook change is not expected over the medium term. A rating downgrade and/or Outlook change to Negative could be considered if there is a significant downturn in the U.S. economy with negative impact on GSBD's earnings performance, asset quality, and leverage. A significant change in senior management and/or risk management policies could also lead to a negative rating action.

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