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Investing.com -- Moody’s Ratings has affirmed Goldman Sachs BDC, Inc.’s (NYSE:GSBD) Baa3 long-term issuer and senior unsecured debt ratings, along with its (P)Baa3 senior unsecured shelf rating. The rating outlook remains stable.
The Baa3 rating is based on GSBD’s standalone assessment of ba1 with one notch of affiliate support uplift. This reflects Moody’s expectation that The Goldman Sachs Group , Inc. (NYSE:GS), the indirect parent of GSBD’s external manager, would provide support if necessary.
GSBD’s ba1 standalone assessment reflects its focus on first-lien senior secured investments and relatively low leverage compared to most rated US finance companies. While the business development company (BDC) has a 1.25x debt-to-equity target, it has recently operated below this level with net debt to equity at 1.16x as of March 31, 2025.
The company maintains a strong portfolio composition with 98% in senior secured loans, including 96% in first-lien investments. However, GSBD faces challenges with higher non-accrual loans at 4.6% at cost or 1.9% at fair value as of March 31, 2025, which exceeds peer medians.
While GSBD’s core profitability has benefited from high interest rates, with trailing 12-month net investment income to average assets of 6.8%, its net income has been negatively affected by investment portfolio losses. This placed its net income to average managed assets ratio at 1.5%, below peer median.
GSBD’s next debt maturity is a $500 million unsecured note due January 2026. The company had $83 million in cash and $720 million available under its revolving credit facility as of March 31, 2025, providing capacity to address this upcoming maturity.
Moody’s stable outlook reflects expectations that GSBD will maintain its first-lien investment focus, sustain good net investment income, successfully refinance its 2026 bond maturity, and keep leverage around 1.25x.
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