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Business Development Companies
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The ABCs of BDCsBig BDC Primer report from RBC today. Brief clip.... Our view: Due to elevated interest and inbound calls around BDCs recently, we thought it would be helpful to provide investors with a primer on business development companies (BDCs). We review the BDC business model and key considerations for investing in BDCs, including credit risks, underwriting track record, liquidity, interest rates, leverage, ROE, and valuation. Not surprisingly, most inbound questions we have heard revolve around potential credit risks within the sector. Given historically wide dispersions of loss rates in the sector, we think stock selection will be critical. ARCC remains our favorite pick within the sector given its scale advantages, well-supported dividends, strong track record of managing risks across the cycle and potential to see more relative benefit from rising rates compared to peers. We would highlight BXSL and TSLX as having investment portfolios skewed towards first-lien loans (>90%). |
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Msg # | Subject | Author | Recs | Date Posted |
3794 | Re: The ABCs of BDCs | PinewoodsBear | 3 | 6/22/2022 2:36:53 PM |