Non Accruals rise, not spike;
Lower middle market BDCs steady at 7.5%

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BDC non-accruals rose to an average of 5.3% at June 30, up from 4.9% at the end of March, based on a DLD analysis using Refinitiv’s BDC Collateral database. Last quarter’s increase hoisted the average above the historical range of 3% to 5% for the first time since the Great Recession.

Even so, the rise wasn’t the spike many had feared after months of Covid closures. Equity injections and waivers kept worse-case scenarios from playing out, and some lower middle market companies were able to tap relief funding.