DNY59/E+ via Getty Images There is a lot of talk about how BDC earnings have peaked and that the next steps from here are directed towards higher volatility and uncertainty around future dividends. There are some, in my opinion, transitory dynamics that drive this, such as subdued M&A activity and increased corporate defaults. However, the structural forces behind all of this are spread compression and, importantly, the expected normalization in the interest rate levels (although what is normal depends ...

Adam Gault In this article, we highlight our recent starter position in the Barings BDC (NYSE:BBDC). The company is overweight Tech, Healthcare and Finance sectors, fairly typical of the average BDC. BBDC trades at a 12% discount to book and a 10.4% dividend yield with a 13% trailing-twelve month net investment income yield. We maintain a Hold rating on the stock - unchanged from our previous review. The company has a relatively high allocation to Equity securities. It is overweight in Tech, Healthcare and ...

tadamichi 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 last week of August. Marke ...

skynesher/E+ via Getty Images Overview In the world of higher interest rates, business development companies were the place to be, since they were able to effectively bring in higher levels of earnings through various streams of debt investments. Since I last covered Barings BDC (NYSE:BBDC) back in May, it has provided a total return of 8.7% which has outpaced that of the S&P 500. At the time, BBDC was trading at an attractive valuation and showed portfolio strength to navigate the higher rate environment. ...

cemagraphicsPalmer Square Capital BDC Inc. (NYSE:PSBD) is a relatively new BDC that was made public in January this year. Although it is still fresh and with a limited public track-record, looking at the fundamentals and the business model, it looks like a very enticing BDC for defensive yield-seeking investors to consider. So far, PSBD has delivered total returns that are almost perfectly in line with the BDC index. Here we can note that PSBD did not experience a negative downturn after the release of ...

Henrik Sorensen Sixth Street Specialty Lending (NYSE:TSLX) reported a decline in net funded investment activity in the second quarter, due to faster repayments from its mostly First Lien investments. The business development company comfortably out-earned its dividend with adjusted net investment income in the second quarter, and the 10% dividend yield should be relatively secure. Though there are risks related to the company’s fairly aggressive floating-rate posture in a lower interest rate environment ...

tadamichi In this article, we take a look at the Q2 results for the BDC Morgan Stanley Direct Lending Fund (NYSE:MSDL). MSDL falls under the $18bn Morgan Stanley private credit platform, which itself sits under the $1.5trn Morgan Stanley Investment Management. The company completed its initial public offering earlier this year, after operating as a private BDC for several years. MSDL trades at an 11.6% yield - above the median in our coverage, and a slight discount to book. MSDL delivered a 3.3% total NAV r ...

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. ...