I will be adding a link to this page in the right hand menu where it will remain
This page is intended to be used as the discussion page for Business Development Company (BDC) items.
By adding this page it is hoped to take some of the discussion ‘pressure’ off of the Sandbox page which is the most used discussion page.
Users who liked this:
I owned ARCC for years (since 2017) and collected 7 years of divvy plus sold covered calls against it several quarters – it finally got called away when the stock ran to 24+ recently. It’s EOY24 NAV was 19.89, so it was getting expensive.
My objective was then to buy it back if it got into the 20-21 range. This morning I sold 20 contracts of the Jun 21 puts for $94/contract. If it is less than 21 come June, I effectively re-own the stock at $20.06. If is rises, I effectively have collected 2 quarters of divvy in only 3 months. We shall see. Owning the stock at waht amount to a tiny percentage over NAV feels okay – ARCC’s mgmt is top notch and, being the largest BDC, I doubt it’s going anywhere anytime soon.
Goin2cali, seems like the slaughter, excuse me the fall in BDC pricing is continuing. I guess there’s a underlying concern that small and middle market companies that are the borrowers are going to be having higher rates of defaults as the tariff wars continue and possibly a slowdown in the economy happens.
One thing to mention is the BB’s of the BDC’S seem to be holding up fairly well. Good lesson that reaching for higher yield buying the common doesn’t make up for the capital loss on the share price.
Slaughter indeed. Some BDCs are at 1-year lows, and some are back to their late 2020 prices. Waiting for a little stability before I buy more than 10 to 20 tracking shares.
My BBs and senior notes of the BDCs are also holding up well, but I’ve generally been staying less than 3 years to maturity. However, I’m keeping my eyes open for the next Ready Capital because I don’t want problems like RCB and RCD or any of the SACH or RILY messes. I’m very grateful for the early warnings from other IIIers on those three companies.
You know, most people buy BDC’s for their juicy dividend then get upset when they have problems and the market rewards the investors with a loss of capital as the price drops. I read a review by a retired analyst of NMFC who said they have spent a decade not doing anything. Their shares outstanding has grown, but the EPS has declined because their income growth hasn’t kept up. Yet 98.5% of their loans are performing. That view is the glass is half empty because the BDC is not taking on more risk to grow the income. For income junkies no growth isn’t what they like to see so this is a sell.
Most of the time I don’t like risk and with the uncertainty going on I like taking risk even less so that is why I like their BB,
Times are uncertain, They are not growing income and actually have less coming in but it seems they are not growing risk either. They only have this one baby bond and it’s due in 3 yrs I would buy more if the price drops.
I wouldn’t characterize this as a slaughter…it’s a mild pullback. When MAIN is still trading at 1.76x NAV, BXSL at 1.18x, CSWC at 1.35X…. there’s still plenty of downside. These traded below, or nearly at, NAV during 2020 and 2022… big air pockets to go if this turns into a recession. Plus, we’ve actually not seen credit spreads breakdown. If you see HY spreads at 450+, that means the BDCs are going to be off substantially more. I’ve used MAIN 6mo puts as hedges to my portfolio….
mrinprophet – At heart I’m a pessimist, and you’re topic sentence of “I wouldn’t characterize this as a slaughter…there’s still plenty of downside” has been the highlight of my day. Thank you.
gointocali I bought a 100 shares to track MFIC on ex-div day at 12.37 on Tuesday.
Seeing declines in BDCs of 5% to 12% in less than two weeks after they come down from Feb. highs. Some posted declines in earnings and decreased dividends (e.g., TCPC, CCAT). Earnings season is largely over, and some BDCs seem to be steady heading into their mid to late March ex-div dates. Post-div, I expect the drops to exceed the divs. I’ve picked up very small amounts of some as tracking shares, but mostly waiting (hoping – sorry to holders) for declines to Dec./Jan. lows.
Gointocali, I have wondered about the the two BDC’s I have bought and have begun wondering if they have peaked in share price. I don’t worry too much about the preferred although they seem to have dropped, just not as much.
I have been reading what Roberts Berzins CFA has been writing and he’s made a few good points. They are only about 50 BDC’s in the group and the market Cap is only about 850 million which makes them more for individual investors and not institutions to invest in. He mentioned the Putnam income ETF and pointed out the top 10 holdings make up about 70% of the holdings so it’s a select group making most of the income. Kinda like the Fang group of stocks.
Like you said, I have been noticing the declines in income reported, dividend cuts, waiver of management fees. Increase in problem loans etc.
Not sure if if we have seen a bottom yet, but I would be interested in some of the ones you have been looking at.
Charles M – Right now, there aren’t any BDCs that interest me enough to buy more than 10 or 20 shares to keep them on my screen, such as TCPC, MSDL, and CCAP, and I expect these to drop more. I’m watching a dozen more, such as TRIN, MFIC, and CION, but I only hold 1 share of each (fear me Wall Street!). We are just in the early stages of the tariff wars and record mortgage delinquencies, and I don’t expect to see the economic results until Q3 or Q4 of 2025. I keep looking at the S&P500 chart from 2018 when it dropped 17% between September and December, and I don’t think I want any part of it. Until then, I’m selling much more than I am buying.
My best to you and everyone on III.
2018 was the first try to raise the Fed rate correct? So what to expect this year? We are less than 10 days away from a government shutdown which with one party in control I think it’s less than a 50% chance of that happening. The game of chicken with tariffs is causing more uncertainty than the budget delay. I think the reporting of end of year and first qtr. Earnings has been good but with the first signs of the economy slowing people are more focused on companies projections for earnings the rest of the year.
With people maybe starting to worry about their job with news talking about cutbacks and tariffs which will cause prices to go higher which keeps inflation up. This will cause both people and business to cut spending then it becomes a feedback loop.
I don’t want to get caught like in 2001 when I thought the market was bottoming and I started buying only to have it keep dropping.
I offer no predictions because everything changes every other day in Washington.
Mrinprophet & goin2cali just an update on my very short time so far on a subscription with a BDC and CEF analyst on SA
Weekly review today of CEF’s – was not an in-depth coverage
Suggested a barbell approach using high risk floating rate CEF trust to get high yield and balancing with say PFO
One’s chart and stock price is in a one year decline and near one year low and the PFO chart is near its all time high.
They mentioned FPEI which is an ETF of institutional preferred for income.
Exactly like you said mrinprophet, it was mentioned credit spreads are tightening and more and more CEF’s are cutting dividends. Quite a lot of Eation Vance
A lot of these are monthly payers.
Side note on CEF that are target date. Some on this site might remember a lot of us flipping Invesco target funds in the last downturn. I can’t remember if it was Tim or another poster that mentioned it but a lot of us jumped on the bandwagon flipping them. These target funds are supposed to terminate on a set date but they have language in their prospectus they can extend the date or even ask for a vote to turn into an open ended CEF
One last note- I cannot recommend holding any BDC or CEF common long term unless you are a yield hog who wants to lay awake at night. If they have preferred or BB you still need to monitor the common for indications of stress.
Charles, re: your last sentence there. I have a few CEF’s that I have had for 30 + years and I absolutely do not lay awake at night worrying about them. ADX, CET, and DNP all bought in early 90’s. UTG same category, bought at inception, 20+ yrs now. STK is another one, 15+ yr hold. Most all others I own bought around the March 2020 Covid meltdown. A few of them I watch harder than others, but mostly on autopilot collecting distro. I don’t know, maybe I just worry less than most. Don’t suppose I’ll ever sell a few of those.
….And I just realized that this is the BDC thread so my post, maybe not relevant, lol. Sorry about that. I’ll just leave it up in case anyone wants the CEF tickers.
Pig , I consider this a good place to post on both the BDC’s and CEF’s as most bloggers over on the dark side follow them side by side.
Thanks for the list
Thanks, Charles M. I’m mostly out of BDCs after a decent run up into their ex div dates. Now, I just waiting (and hoping) that some of them drop down to my buy prices.
I’m not looking to buy anything or increase my holdings at this time in the common or the preferred. Right now just waiting. I did like Jobsch’s suggestion about watching for tops on growth stocks you hold and selling near the peak.
The announcement today of TD bank selling it’s holding of Schwab and other news like Schwab saying trading volume has been down since the first of the year and other comments in the news about MLP’s peaking leads me to believe I am not the only one waiting and reefing in the sails in case of a storm.
From the WSJ this morning: “The money behind the first data center in Stargate, the high-profile AI project, is coming from an unlikely source: Blue Owl Capital.
The asset-management firm, known mostly for its private-credit lending, is targeting big investment returns and asset growth from swopping into AI.”
From their website – https://www.blueowl.com/
“Redefining
alternatives®
At Blue Owl, we are doing more than just investing in private markets—we are shaping the future of alternatives. We serve our investors by being a partner of choice for businesses seeking private capital solutions.”
Blue Owl seems to be one of those companies that names everything they’re involved in some form of “Blue Owl.” They have different buckets for different things, so you have to be careful should you be investing in Blue Owl to make sure you’re buying into the right one…. There’s Blue Owl Finance, Blue Owl Income, Blue Owl Technology Finance, Blue Owl Capital, Blue Owl CR Income, etc. all listed at Fido as issuers of fixed income…. Not knocking them, just pointing out it’s one of those that you have to pay attention to what you’re buying….. For example, I wonder which entity is funding Stargate? Is it Blue Owl Technology or like many other big firms similar to them are they spreading it among most of their namesakes?
Blue Owl Capital Inc [OWL] is the parent.
2wr-
I’m having a Cathie Wood moment.
2WR in the last couple months when I was looking at bonds on Fido I was seeing nothing but Blue owl listed. I was wary when I saw all those bonds. Lots of debt.
Given the couple of questions posted, I thought i would give my perspective. For work, I’ve met with many private credit managers (middle market direct lending, sponsored, many of which have a BDC) and invested with a few starting 2016/17. That really helped build a base of understanding in the space. I then subscribed to BDC Buzz for one year and so I could get his reports and it was invaluable. I would only do this if you are going to be making a $100k investment in BDCs to make it worth the cost, but it was a good education.
BDCs were nearly 15% of my personal portfolio back in mid-23 when I started selling down due to credit spreads tightening (under 400bps). I was too early…. but better early than late. Today I’m down to just owning 100 shares of my five favorite BDCs so I can watch them. I’m waiting for the next hiccup in credit when spreads blow out to 500+. That should coincide with equity market weakness and BDC prices falling in concert. It’s then that I’ll be interested in re-entering the space in size.
Today, almost all my in bound calls are from private credit managers. Allocators seem to view the asset class as the magic bullet… 10% returns with almost no vol. Private equity has slowed (fundraising, deals, distributions) and this, in turn, is going to cause some issues because many of these five year loans are made with the idea that the PE sponsor will have sold it in 5yrs and thus they’d be cashed out. My fear is that many of the new private credit managers (and their BDCs) have been able to raise large sums of money, get into syndicated deals, priced them assuming they succeed… and have no plan for what happens if they don’t. If you are going to invest in BDCs, I’d look to find managers that have analysts and teams that actually do work outs. It also means finding those that are big enough to be the majority lender… because they’ll have control if things go bad. Experience, scale, fees, leverage, % senior/unitranche.
mrinprophet your timing is perfect. Last night I was going over brands and companies I know in the building business. A major change has been going on since the 90’s with the consolidation of manufacturers and distribution by conglomerates and private equity that there are not too many independents left. It’s all 800# gorillas in the room. It’s gotten so bad these companies trade what they own between themselves. KKR buys something and owns it for a few years then sells it to Green partners.
I came across QXO on SA and I had to laugh when I read analysts saying the building market is fragmented and this group had raised like 2 or 4 billion to buy into the fragmented building industry and was going to make them more efficient by modernizing operations with management software. The investors who got talked into QXO need to get their money back. Oh, and the bloggers spouting how great QXO is going to be are not on my follow list.
mrinprophet, please share the 5 BDCs that you follow. I’m just an amateur in the space and I track about 12 BDCs, but it is obvious that many BDCs are in trouble with declining earnings and possibly future dividend cuts. It seems to be a bit of a mine field. I’ve had some success, but only by buying 2 to 4 weeks before earnings or dividend ex-dates and then selling about 2 to 4 days before those events. Very good returns, but it takes work and is more like gambling than investing. Thanks.
Happy to share… but I would caution that this is my list and not advice.
GBDC, CCAP, TSLX, ARCC, BXSL. These are in order from my highest to lowest conviction.
Raymond James puts out a BDC weekly report that I find very informative. The factors I mentioned in the above post show what I want to own… while I look to P/NAV relative to historical as when to buy. I would note that i follow closely a few more. Watch out for picking up pennies in front of the steamroller…
Thank you. I have CCAP and ARCC. I’ll research the other 3 and decide if they are a good fit for my portfolio. Best regards.
Thank you Sir! I started to get into a few BDC’s that I could not find any preferred for. I will look more closely at them
goin2cali I will second what mrinprophet says about being a dividend flipper and feeling defensive now especially given the equity markets have been nothing but up.
When I first got into seriously managing my own money in 2012 I was worried I needed to catch up on growing my IRA and at the time I started following a certain Rida over on SA who was using this flip and dividend capture method touting it a fail proof way to make money.
To paraphrase what Theta has said on this site ” all it takes is one loss to wipe out the profits you made on the other trades”
Nothing wrong with this method, especially if you have the time to hone your skills and become a better player. But starting in my 50’s I was at the outer age limit of having time to make up losses. But I am not knocking it.
Thanks, Charles M. I agree with you. It is risky and time consuming. I limit my exposure to BDCs 2% of my portfolio, which is balanced by nearly 80% in CDs, MMs, and agency bonds. The rest is in preferreds (mostly floaters and resets) and baby bonds. However, that 2% in BDCs is by far my highest yielding allocation based on overall percent return. But, many BDCs took large losses in 2024, and I currently don’t trust any of them for long-term holds.
Received my dividend today on MSDL The BDC seems to be holding its share price.
Here is the Raymond James link
https://www.raymondjames.com/-/media/rj/dotcom/files/corporations-and-institutions/investment-banking/industry-insight/bdc_update.pdf
Iv’ve owned ARCC for a long time ; it’s a core holding
also own FDUS and been buying a smaller one lately BBDC
mrinprophet, I might add MSDL to your list as well as HTGC
I also think you’re correct on waiting for another opportunity as all of these showed a dip in share price at the end and beginning of July/August last year in their charts.
Still a little hesitant to hold the common in BDC’s as I think 2025 is not going to be as good for them as 2023 and 2024 were.
Thanks Charles. Good call on MSDL as it fits what I’m looking for. HTGC is out of my comfort zone… I don’t do Venture Lending… in my opinion, with venture there just aren’t enough hard assets to sell if things go back so recovery rates aren’t there. Too much PIK, usually. Just not my cup of tea, but HTGC has performed well. JMO, but if you want to own venture, you have to benefit from the right tail as there’s too many zeros… and if that’s the case I don’t want to be the lender.
mrinprophet, yeah I forgot that first wave of hot internet stocks back in 2001 I’m sure the BDC’s and venture capitalists were glad they got out when a lot went public and they got their money back just before they went bust. Not much money in office cubicles and desks and chairs. Although I remember office liquidators must have been making money for all they spent on radio ads. Just a general comment, not related probably.
Why SWKHL was my latest hair brained idea. I got in and out at a small loss. FIDO Nanny made me realize it’s illiquid and nothing like a illiquid Ute with hard assets. Not worth the risk even for a 9% return.
The market feels uncertain at least to me let alone 2 yrs out on a specialty Mico cap BDC that original equity investors sound like they are impatient to cash out.
mrinprophet I have only started venturing into BDC common and could be a bad time to start, I only hold 2 and only 1% of all our holdings. On the other hand I own more than that of the different BDC’s baby bonds.
I don’t hold any Treasuries but have SPAXX at 21% of the account currently.
Charles
My Cash equivalent rather than SPAAX is JAAA
Not as safe but safe enough for me
Westie – Yield wise, how does JAAA compare to SGOV? Do you get paid enough to use JAAA?
Looks like JAAA is currently at 6.33%, while SGOV is at 5.09%. The spread looks pretty constant over the last year. For a little more comparison, SPAXX is at 4.14%, JBBB is 7.64, and CLOZ and 9.04%.
thanks Nathan. Spread doesn’t seem too tight in this environment….. might move some SGOV over but small size only.
mrinprophet, today’s price movement in CCIA got me wondering. I know it’s comparing apples to oranges so these observations are just me thinking out loud. CCIF I think was started as Vertical Capital about 2011 right at the end of GFC ( always a good time to start building in the ashes after a fire has burned everything down) They registered A & C shares in 2019 going public at about $12.21 nav on the A shares. In 2023 They changed the name and stock symbol to CCIF I’m not going to dig too deep in the weeds but I “could” assume Carlyle who advises them bought into the fund or bought out some of the original shareholders.
Point is this started out as 12.21 stock and is now at around $7.80 I always hear investors say “oh but I got x dividends over the last 6 years. Without adding it up, I am going to assume an investor is ahead counting the dividends.
Let’s be generous and say assets are worth 120 million. Per the SEC filing
https://www.sec.gov/Archives/edgar/data/1517767/000158064219000369/vertical486b.htm
Up to 10% of assets can be delinquent or in default. Not saying they are currently.
So if something happens, they have to sell assets or issue more common shares to keep up coverage. This can be difficult in a down market.
Compare this to MSDL ‘s market cap of 1.84 billion supported directly by MS.
Just my justification to convince myself to buy the common of this BDC
i would suggest OBDC as an alternative to MSDL ( i own a lot of both)
now that obde has merged with it ; the parent OWL is a solid company
Ted, go here https://www.finra.org/finra-data/fixed-income/corp-and-agency
Type in Blue owl. lot of debt rated BBB & Baa3 issued under their BDC’s kinda opposite of other BDC’s issuing BB and preferred. I saw a lot of this offered on Fido last year. Prices seem to be holding up pretty well for this kind of rating.
The 7.95 that is due in 2 yrs is above par.
i’m just not getting the warm fuzzies about this market compared to the beginning of last year to own Baa3 bonds over par. Different group of investors but just feels like they are too confident. Just me being Eeyore
The merger closed January 13, and going forward could see some volatility as the lock ups expire for the OBDE share holders.
Couple questions here on BDC’s See Papa Doc’s post from about a month ago. It brought up a good point about the larger Private Equity firms gaining market share and buying up smaller BDC’s or leaving small BDC’s to fight over the higher risk crumbs. This is the rule of the jungle or business world. If you think about it.
I was going through old files and shredding old paperwork. Came across trades for Wickes Co’s , Lumber 84 now all we hear about is HD and Lowes.
I apologize for the long entry. Where I am going is this.
I had an offer today of 35% off a one time annual subscription of an analyst group. They review BDC’s and CEF’s as well as preferred and bonds. Honestly their regular subscription is half what some of the other talking heads are asking.
Here’s the thing, I sometimes get more insight from the comments than the article. This brings me back to Papa Doc’s observation. When you compare Market cap, Yield, Share price and the important non performing loans aspect of BBDC and BXSL I can see the correlation between the difference in risk and yield between the bigger and the smaller.
I have not been happy with SA’s business model and not sure I want to pay for observations by what Tip Ranks calls a Blogger. I think I have read here that if you sign up for a subscription and drop it SA will block you. Any experiences from others here ?
Charles M: I signed up to SA for 1 year and dropped it. I can still get quotes from it, and I can research a stocks earnings, divs., NAV, etc. I can also read about 1 article per month, but that’s it, so I’m very selective about what I read. I found that a small number of writers were quite good, but most were not.
goin2cali, I read a lot of what is available to the public on SA and if it’s blocked I am not sure it’s that important.
I am open to reading what any writer has to say but on the other hand there are some I avoid because they are shallow and the writers pump out massive volumes just to get an audience. No one is 100% on their picks so if they are correct 60% of the time and their winners are bigger than their losers they come out ahead, just like a roommate I had 40 yrs ago who played the ponies.
Some of these writers used to be professionals doing analysis and we all should know by now how great the track record is of the majority of mutual funds over time.
The comments are the little nuggets of gold I find more valuable.
SA is the only subscription I have ; and I feel it’s well worth the money;
i have several excellent analysts I follow for ideas and their current take
on my holdings ; Preferreds, BDCs and CEFs
Quick question for any BDC investors out there.
How are the publicly traded BDCs going to compete with the Blackrocks of the world when Blackrock is paying $12B to gain more market share in the private credit industry? Blackrock already had an $85B private credit platform. Isn’t the private credit market essentially just a giant BDC?
Been considering shorting some of the bigger publicly traded BDCs in 2025 or even BIZD. My guess is all that will be left for them is lending to the truly high risk companies. You can already see some of the mistakes they are making in recent BDC EPS reports.
https://www.reuters.com/business/finance/blackrock-strikes-12-bln-deal-private-credit-firm-hps-investment-2024-12-03/
“Dec 3 (Reuters) – BlackRock will buy private credit firm HPS Investment Partners for about $12 billion in an all-stock deal, the companies said on Tuesday, as the world’s largest asset manager seeks to expand in a red-hot market.
Private credit, or lending to companies by institutions other than banks, has grown rapidly in recent years as stricter regulations made it more expensive for traditional lenders to finance riskier loans.
The asset class is expected to grow to $2.6 trillion by 2029 from $1.5 trillion at the end of 2023, according to Preqin data, opens new tab.
“Together we will deliver income solutions for our clients that blend both the best of the public markets and the best of the private markets in an organized, unified fashion,” BlackRock CEO Larry Fink said on Tuesday.
He has previously outlined private credit to be a “primary growth driver” within alternatives for BlackRock in coming years.”
Thanks Doc,
Actually their buying spree could extend to some of the larger and older P.E. like Carlye group. which is private but runs the publicly traded BDC CGBD.
What then?
Good luck shorting in this high fueled growth area. You would need a catalyst like another extended covid with companies going dormant and shutdown. I don’t think any analysts are recommending to short this space at all. A lot of $$$ continue to be made in this space, especially since the rate reductions are slowing down.
Medical staff on the front line of the battle against mpox in eastern Democratic Republic of Congo have told the BBC they are desperate for vaccines to arrive so they can stem the rate of new infections.
bs.gl
At a treatment centre in South Kivu province that the BBC visited in the epicentre of the outbreak, they say more patients are arriving every day – especially babies – and there is a shortage of essential equipment.
blacksprut com
https://bs2bot.cc
Mpox – formerly known as monkeypox – is a highly contagious disease and has killed at least 635 people in DR Congo this year.
Even though 200,000 vaccines, donated by the European Commission, were flown into the capital, Kinshasa, last week, they are yet to be transported across this vast country – and it could be several weeks before they reach South Kivu.
“We’ve learned from social media that the vaccine is already available,” Emmanuel Fikiri, a nurse working at the clinic that has been turned into a specialist centre to tackle the virus, told the BBC.
He said this was the first time he had treated patients with mpox and every day he feared catching it and passing it on to his own children – aged seven, five and one.
“You saw how I touched the patients because that’s my job as a nurse. So, we’re asking the government to help us by first giving us the vaccines.”
The reason it will take time to transport the vaccines is that they need to be stored at a precise temperature – below freezing – to maintain their potency, plus they need to be sent to rural areas of South Kivu, like Kamituga, Kavumu and Lwiro, where the outbreak is rife.
The lack of infrastructure and bad roads mean that helicopters could possibly be used to drop some of the vaccines, which will further drive up costs in a country that is already struggling financially.
At the community clinic, Dr Pacifique Karanzo appeared fatigued and downbeat having been rushed off his feet all morning.
Although he wore a face shield, I could see the sweat running down his face. He said he was saddened to see patients sharing beds.
“You will even see that the patients are sleeping on the floor,” he told me, clearly exasperated.
“The only support we have already had is a little medicine for the patients and water. As far as other challenges are concerned, there’s still no staff motivation.”
blacksprut com
Capital Southwest Announces Pricing of Convertible Notes Offering…
https://www.globenewswire.com/news-release/2024/11/05/2974571/0/en/Capital-Southwest-Announces-Pricing-of-Convertible-Notes-Offering.html
Does anyone have experience / comments on BIZD, the VanEck BDC income etf? I am setting up my wife’s retirement dividend account and would like to include at least one BDC in the account. BIZD is an etf that includes many BDCs (ARCC, Main St, KKR, etc) / pays a 10% dividend / Morningstar rating of 3*. However it does have a very high expense ration of 10+%.
I currently own ARCC and am very happy with it’s performance. On the surface, BIZD appears to good to be true.
this is an Index fund , and the fees seem excessive for doing nothing but tracking an Index; 21.7% of it’s assets are in ARCC ;
so just by it ; I also own OBDC and MSDL on their top ten list , and i;de buy either one of those now ;
Ted, thanks for the comments. I will take a look at both OBDC and MSDL. I am looking for “sock drawer” dividend paying investments for my wife’s retirement portfolio. Based on a very quick look, MSDL does not appear to meet this criteria.
Larry, this website might help a little bit in your research. It’s a weekly summary of statistical data about BDC’s. It is not comprehensive, but it’s a start…
scroll down to the bottom for a PDF you can use.
https://www.raymondjames.com/corporations-and-institutions/investment-banking/industries-of-focus/financial-services/bdcs-closed-end-funds-and-spacs
LarryL, here is another BDC source. once again, not comprehensive but a good place for a quick reference. The website takes a while to load.
https://cefdata.com/bdc/
Another BDC website to be aware of is https://bdcreporter.com/
Depending on how much you are planning to invest in BDCs, the paid subscription might be worth your while. I was a frequent reader back when more analysis was available for free, and the analysis was always clear and in depth.
yes, that’s a good one and i’ve read his reporting for a number of years now.
would recommend PBDC actively managed bdc etf.. it has outperformed since inception september 2022 with little variance.. the pbdc/bizd pair is currently trading near fair value
mjtroll, both of these funds have very similar holdings, both track an index and both have very high expenses at approximately 13%. Don’t understand how an index tracking fund can get away with charging such high expenses.
Thanks for the info.
Went from half to full position in MSDL @ $19.72.
msdl – definitely one of the, if not the, best values (with high quality) right now in bdc space imo
mostly due to the lockup releases of the stock for the formerly private bdc imo
i started a position here yesterday and will add on weakness
I thought this article from Fitch on PIK and BDC’s was interesting. I’d like to find more information on this subject.
https://www.fitchratings.com/research/corporate-finance/fitch-ratings-bdc-cash-income-dividend-coverage-pressured-by-payment-in-kind-income-03-09-2024
Thanks Voner, good read. Article picked out several of the better known BDC’s and posted their credit rating and PIK income. Two metrics to look at. What the article didn’t do was give an example of BDC’s that have higher PIK. Also something to look at is the percentage of loans placed on non payment.
I believe there are a couple types of PIK- the less dangerous is written into the original contract, the other develops as the company gets into trouble & writes a pik IOU, so to speak.
Q online is showing a new issue , CICB 7.5%
The best source of information on all BDC’s that I have found is The BDC Universe, https://cefdata.com/bdc/.
This is a free site where information is updated daily.
You can print a 4 page report (landscape) of all BDC’s and relevant financial inf.
It takes a few minutes to download due to all the info.
Thanks for the link.
Is there any site where PIK income is summarized by BDC?
Great question.
The only source I am aware of is BDC BUZZ which requires a subscription.
BDC BUZZ has free articles on Seeking Alpha. It is an excellent source of their methodology and analysis. If you enjoy their free stuff and are interested in going deeper, there’s a good chance you’ll find their paid material (subscription service) well worth it. I’ve learned there’s a lot more to BDC investing than NAV yield etc.
https://seekingalpha.com/author/bdc-buzz/analysis
The “BDC Reporter” (https://bdcreporter.com/) has a lot of information, most of it only for paying subscribers although there is the occasional freebie. It is a one-man operation run by one very thorough analyst. The quality of what I have read is excellent, but my BDC portfolio is not larger enough to justify paying for a subscription.
BDC New Mountain Finance, (NMFC) issued new make whole note 6.2% due 10/15/27 Baa3/BBB-/BBB-, cusip #647551AG5.
CEFA is a great resource for CEFs.
https://www.cefa.com/
Does not provide debt issues of the underlying.
Does provide a lot of product information as well as relative to indexes and ratings.
Very useful for comparisons and identifying ‘silos’ for sector diversification.
I generally prefer total assets greater than $50 – 100mm. While $50mm may seem low, there are several long-time vendors, 15-20years++ who have maintained smaller-sized total-portfolio holdings. They have survived and also generate nice $Distros!
JMHO, Steven
Thanks Steve, All the info everyone is sharing is great
One of my fav. BDC which add to periodically is ARCC.
Glad entertaining separate thread for BDCs.
Tim,
Have you given any thought as this site’s popularity grows that this current format might not work out long term? Some examples are it is hard to find older conversations, that more complex topics are hard to discuss over a longer period of time due to them getting buried/lost, that longer topics cannot be held reasonably well due to structure of them, etc…?
I agree this works perfectly fine with fewer users but if I walked away for a month and came back it would be difficult to catch up in a reasonable manner. Sometimes a conversation starts in READER ALERTS, then flows over to a main post you create, and then possibly leaks into the sandbox down the road. It is hard to keep track of things. When people post things they obviously want the most eyes on it as possible to get the best replies.
Just talking out loud. I am not sure what replacements there are with minimal work while also keeping the blog like nature of the site. This currently feels very word pressy to me.
Tim,
I hope others don’t mind, but I might also discuss CEF here as a lot of us hold preferred in them and some may hold the common.
BDC / CEF might work . I find myself looking at more income alternatives as rates drop.
Bear, the new head of Vanguard said that the company would be looking at the expansion of fixed income. Will probably take quite awhile but at least they are headed in the right direction. Here are a few clips from their release and a link to the article…..
Vanguard’s new chief, Salim Ramji, said on Wednesday that he plans to expand the fixed income offering of the U.S. top asset manager given the market’s size and opportunities.
“When you look at the macro environment for fixed income today , relative to say 10 years ago, it has a really important place,” said Ramji. “It’s going to be more important based on … our views of the long-term rate
environment,” he added.
Ramji said he was also looking at opportunities in private markets, a sector that includes debt and equity that is not publicly traded or listed. “In privates we’re open to exploring partnerships,” he said.
https://www.reuters.com/markets/us/vanguards-new-ceo-eyes-fixed-income-offering-expansion-2024-09-25/#:~:text=NEW%20YORK%2C%20Sept%2025%20(Reuters,the%20market's%20size%20and%20opportunities.
Steve good post. Doesn’t take a lot of thought about adding more fixed income considering that the over 60 demographics has been increasing and we want less risk and a little more safer income. Also since the retail investor is restricted from buying anything designated 144a it would make sense for Vanguard to buy and package something for income investors.
CM
It’s a good time to review CEF.!! I like to remind myself what their longer term charts look like…..as I take a closer look at any issue. Some are still buys at such high levels.
If you Prefer, what is the coverage, do they have preferred, what level of debt do they invest in, and what is the extent of non-performing loans. discount to nave means little to me but I like seeing the stock above 10.00 a share, the higher the better. I like to see if Quantum lists any reverse stock splits. I also like going to the dividend channel and looking at the history of the common dividend to see if it has been increasing or is there a history of dividend cuts. Cutting dividends is an indicator to me of the preferred being a higher risk investment.