BDC Cash Income Dividend Coverage Pressured by Payment-in-Kind Income Click here to learn more. U.S. business development companies’ (BDCs) cash earnings coverage of dividends is expected to weaken further from 2Q24 levels as the persistence of elevated interest rates will drive further increases in paid-in-kind (PIK) income, Fitch Ratings says. Potential rate cuts, spread compression…
Fitch’s Privately Monitored Middle Market Portfolio Overview, 2Q24 Click here to download report. In the charts that follow, Fitch presents aggregate data for MM companies, defined as in the area of $500 million of debt or $100 million of EBITDA or below, that it privately rates for asset managers…. Subscribe to Read MoreAlready a member?
Fitch’s Privately Monitored Middle Market Portfolio Overview, 2Q24 Click here to download report. In the charts that follow, Fitch presents aggregate data for MM companies, defined as in the area of $500 million of debt or $100 million of EBITDA or below, that it privately rates for asset managers…. Subscribe to Read MoreAlready a member?
Comparing Business Development Companies and Middle Market Collateralized Loan Obligations (Part 2) Click here to learn more. There can be a meaningful difference in the seniority of the assets in a MM CLO versus those in a BDC. MM CLOs consist almost exclusively of first lien senior secured loans, while BDCs can invest all the…
Comparing Business Development Companies and Middle Market Collateralized Loan Obligations (Part 1) Click here to learn more. While the expansion in private credit has attracted widespread media attention in recent years, direct lending has been around for several decades and remains the largest segment of private credit. Two of the most prominent financing vehicles in…
Fewer PMR ‘CCC’s Reach the ‘B’ Category Click here to learn more. Once in the ‘CCC’ category, fewer issuers in the PMR portfolio ascend to the ‘B’ category than public peers. The AAT% of ‘CCC’ category issuers that reach the ‘B’ category is just 11% in the PMR portfolio compared to 18% for Fitch’s public…
PMRs Stay Longer in ‘CCC’ Category Click here to learn more. PMR issuers within the ‘CCC’ category have a lower average annual upgrade rate, lower average annual default rate and a higher average annual stability rate than publicly rated peers. Different stakeholder dynamics within the direct lending segment play a role in the lower number…
PMR Portfolio Concentrated in Lower Rating Categories Click here to learn more. The PMR portfolio consists exclusively of ‘B’ category and below issuers as the companies in the portfolio generally tend to be the product of leveraging transactions such as sponsor-driven LBOs or dividend recaps…. Subscribe to Read MoreAlready a member? Log in here...
Fitch U.S. MM CLO Spotlight – May 2024 Click here to learn more. ‘CCC’ Exposure Marginally Up Exposure to assets with Fitch IDRs or credit opinions of ‘CCC+’ or below, excluding nonrated assets, increased by 20 bps to 18.6%, compared to last month and 3.5% higher than a year ago…. Subscribe to Read MoreAlready a
Fitch U.S. MM CLO Spotlight – May 2024 Click here to learn more. Defaults and Deferring Exposure Flat Twenty-five CLOs had exposure to at least one defaulted or deferring issuer at the end of May 2024. Average defaulted and deferring exposure across middle market (MM) CLOs remained at 0.7%…. Subscribe to Read MoreAlready a member?