Click here to learn more.
U.S. business development companies (BDCs) face increasing pressure in 2026 as slower capital inflows and elevated redemptions weaken liquidity, while competitive underwriting and interest rates weigh on asset quality and earnings.
Fitch maintains a sector-wide ‘deteriorating’ outlook for BDCs, reflecting expectations for continued pressure on net investment income and dividend coverage, reduced funding flexibility and liquidity, a competitive underwriting environment and non-accruals remaining above historical averages. Elevated redemptions at perpetually non-traded BDCs could constrain liquidity and reshape the competitive landscape.
Latest news
US Leveraged Loans Return 3.36% to Investors YTD
The Bloomberg US Leveraged Loan Index (Ticker: LOAN) returned 0.96% in August and has gained an additional 0.28% through September…
PE dry powder
The capital that is being raised is flowing overwhelmingly to the largest, most established managers.
Middle market debt held by BDCs vs High yield vs Treasury yields
The blue line represents the current dividend yield of the VanEck BDC Income ETF (BIZD), which stood at 11.7% as…