Barings BDC, Inc. 8-K

What Happened

• Barings BDC, Inc. (BBDC) filed an 8-K disclosing that on May 29, 2026 it terminated its prior Sierra Credit Support Agreement (dated Feb 25, 2022) and entered into a new Credit Support Agreement (New CSA) with its adviser, Barings LLC. The New CSA provides credit support for two legacy Sierra portfolio companies with a Remaining Obligation equal to the $10,994,928 fair value of those investments as of May 29, 2026.

Key Details

• The New CSA covers the two Sierra legacy portfolio companies and any modifications or proceeds from those investments (the “Reference Portfolio”).
• Adviser’s obligation: cover “Covered Losses” (aggregate fair value at date of New CSA minus proceeds from dispositions/maturities/write-offs) up to the Remaining Obligation of $10,994,928.
• Designated Settlement Date: earlier of April 1, 2032 or the date the Reference Portfolio is fully realized or written off.
• Settlement mechanics: Adviser will irrevocably waive incentive fees (and, if needed, base management fees) under the investment advisory agreement during a four-quarter “Waiver Period” following the quarter of the Designated Settlement Date; if Covered Losses exceed waived fees, Adviser will make a cash payment equal to the excess on the final fee payment date in the Waiver Period.
• The New CSA automatically terminates if the Adviser (or an affiliate) stops serving as the Company’s investment adviser (other than a voluntary Adviser termination). A Termination and Cancellation Agreement was executed concurrently on May 29, 2026.

Why It Matters

• This agreement provides explicit downside protection for investors by preserving coverage for nearly $11.0 million of remaining unrealized value in two legacy Sierra investments. The adviser’s fee waivers and potential cash payment create a capped recovery mechanism for losses on those specific holdings. Investors should note the protection is limited to the stated Remaining Obligation, subject to the Designated Settlement Date and the Adviser’s ongoing role as investment adviser.