The blue line in the chart represents the current dividend yield of the VanEck BDC Income ETF (BIZD), which stood at 13.4% as of 8 May (up 156bps YTD and 168bps YoY). The yield increase is a function of lower BDC equity prices relative to trailing dividend distributions, with a broad portion of the sector trading below NAV. Listed BDCs are trading at an average price-to-NAV of 0.81x as of 9 May, with only 7 out of 45 trading at or above NAV, per BDC Investor. The primary reason remains elevated portfolio credit concerns, higher default risk in AI-exposed middle-market credits, and rise in redemption requests in 1Q26, with most funds capping withdrawals at their 5% quarterly limit. Fitch’s US Private Credit default rate as per its 30 April report rose to 5.7% in 1Q26 from 5.4% in the prior quarter, with a record 24 new unique quarterly defaulters. The primary monitored rating (PMR) default rate (which tracks borrowers whose payment terms have been modified, such as PIK conversions and interest deferrals) also hit a new high of 10.0% in 1Q26, up from 9.2% in 4Q25.
Debtwire Middle-Market – 5/11/2026
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