magical_lightThe overall BDC space has relatively recently become subject to multiple headwinds that either limit further growth or, in most cases, introduce a significant pressure to shield the results achieved so far. Yet, if we look at the total return statistics of BDC market index like VanEck BDC Income ETF (BIZD), we will not observe severe corrections. There is some drop, but in the context of a ~ 3-year bull run, it might just as well be interpreted as a healthy and temporary correction before n ...

PM ImagesIntroduction Kayne Anderson launched the Kayne Anderson BDC (NYSE:KBDC) in late 2021, entering the investment that has many established firms launching their first Business Development Corporation. Founded in 1984, Kayne Anderson is a prominent alternative investment management firm focused on real estate, credit, energy infrastructure and energy. Investment vehicles managed or advised by Kayne Anderson have $36 billion in AUM. For more on Kayne Anderson, use this link. As with almost all BDCs ...

Galeanu Mihai Welcome to another installment of our BDC Market Weekly Review, where we discuss market activity in the Business Development Company ("BDC") sector from both the bottom-up - highlighting individual news and events - as well as the top-down - providing an overview of the broader market. We also try to add some historical context as well as relevant themes that look to be driving the market or that investors ought to be mindful of. This update covers the period through the fourth week of August. ...

OGphoto Prospect Capital (NASDAQ:PSEC) is a BDC. It invests in loans to small and midcap companies, generally first lien loans. It also has an investment in a private REIT and has some CLO investments as well (which is not particularly unusual for BDCs). First let’s talk about a negative article that came out around August 7th on PSEC common stock, and then I will explain why the negative article means little in regard to the bonds and why this article has created a great buying opportunity due to emoti ...

Richard DruryTriplePoint Venture Growth (NYSE:TPVG) chopped its dividend by 25% this month due to insufficient net investment income and performance challenges in the debt portfolio. The dividend cut was widely expected, as the BDC’s shares traded at a dividend yield of up 19% prior to the announcement. I believe TriplePoint Venture Growth cut its dividend down to a more manageable level and the new distribution of $0.30/share is more sustainable. A rise in the non-accrual percentage, persistent investm ...

ismagilov Focus of Article The focus of PART 1 of this article is to analyze Golub Capital BDC's (NASDAQ:GBDC) recent results and compare a handful of the company’s metrics to 14 business development company (“BDC”) peers. This analysis will show past and current data with supporting documentation. Table 1 will compare GBDC’s recent net asset value (“NAV”) economic return (loss), net investment income (“NII”), stock price to annualized NII ratio, and percentage of total investment income attributable to ...

Earnings and Financial Performance - Goldman Sachs BDC reported a sharp correction in shares following its Q2 fiscal results, driven by a significant increase in non-accrual percentages [1] - The non-accrual percentage based on fair value increased to 3.4% in Q2'24, a more than 100% increase quarter-over-quarter [5] - Net investment income (NII) declined to $108.6M in Q2'24, down 3% year-over-year and quarter-over-quarter [5] - Interest from variable rate loans fell to $107.0M, a 4% year-over-year and 3% quarter-over-quarter decline [5] - Dividend coverage remained robust at 1.31X in Q2'24, up from 1.22X in the previous quarter [5] Portfolio and Investment Strategy - Goldman Sachs BDC primarily focuses on first lien investments, which represented 97% of its $3.5B investment portfolio as of June 2024 [4] - The company placed two portfolio companies on non-accrual in Q2'24, contributing to the sharp rise in non-accrual percentages [5] - Non-accrual percentages based on amortized cost increased to 7.6% in Q2'24, up from 3.3% in Q1'24 [5] Valuation and Market Sentiment - Goldman Sachs BDC's shares are valued at a P/NAV ratio of 1.04X, below the 3-year average of 1.07X [6] - The company's fair value is estimated at $13.67 per share, reflecting a 1.0X P/NAV ratio due to concerns over balance sheet quality and NII performance [6] - Market sentiment was negatively impacted by fears of lower federal fund rates and weak Q2 earnings [6] Industry and Competitive Landscape - Goldman Sachs BDC faces headwinds from the Federal Reserve's potential rate cuts, which could weaken NII growth for BDCs with variable rate loan investments [3][6] - Competitors like Ares Capital (ARCC) and Blue Owl Capital (OBDC) trade at P/NAV ratios of 1.07X and 0.98X, respectively [6] - Blue Owl Capital's recent merger announcement is seen as a potential revaluation catalyst [6] Dividend and Income Risks - Goldman Sachs BDC's dividend is currently supported by NII, but risks to future dividend coverage have increased due to rising non-accrual percentages [7][8] - The company's ability to maintain its dividend depends on recovering or restructuring non-accrual investments [8]

Henrik Sorensen/DigitalVision via Getty Images Welcome to another installment of our BDC Market Weekly Review, where we discuss market activity in the Business Development Company ("BDC") sector from both the bottom-up - highlighting individual news and events - as well as the top-down - providing an overview of the broader market. We also try to add some historical context as well as relevant themes that look to be driving the market or that investors ought to be mindful of. This update covers the peri ...

Pavel Muravev Over the last several months we have continually highlighted both the richness of valuations across the income investment landscape as well as the disconnect between these valuations and a clearly slowing macrocycle. Over the last couple of weeks, however, we added a number of new BDC positions. Since BDCs tend to be higher-yielding / higher-beta securities, this move begs the question of why we are adding BDCs in an objectively expensive credit market. In this article, we dissect the reas ...

tadamichi In this article, we discuss the business development company (“BDC”) Nuveen Churchill Direct Lending Corp. (NYSE:NCDL). The company IPO'd earlier in the year, along with several other previously private BDCs. NCDL trades at a 13% dividend yield and has a net investment yield of 13.4% — slightly above the sector average. Its price trades at a 6% discount to book, slightly below the median and 7% below the average BDC in our coverage. The company delivered a 2.1% total NAV return over the quarte ...