RESEARCH: BDC 2Q17 Health Report measures asset class performance; Carlyle BDC added to coverage

11 September 2017

Debtwire Middle Market’s BDC Health Report features financial statistics and key portfolio measures for ~ 40 of the largest public business development companies (BDCs) in terms of market capitalization, that we cover, from the universe of ~ 55 public BDCs. The report includes specific metrics that we believe effect and help portray the health of BDCs in our coverage universe.

 

The analysis comprised in the report illustrates a high-level overview of the space, and various company and industry-wide comparative performance data sets. On a granular level, we detail the relationship between stock price and net asset value and portfolio distress. Specifically, we displayed the percentage of assets marked below 95% face value and 80% face value (page 5).

 

The broader part of the report features reported net investment income and stock performance of the BDCs vs. widely traded indexes (page 10).

 

We also include a chart which displays the percentage of total assets marked below 95% face value within certain industries, including energy, food and retail. (page 7).

 

For 2Q17, we have added Carlyle’s BDC, TCG BDC, Inc. (CGBD), which IPO’ed in June 2017, to our coverage.

 

An increased supply of middle-market direct lenders continues to be a theme for the sector and a possible concern for BDCs. As tolerance for borrower friendly conditions persist, BDCs (especially those with less robust origination platforms) may face lower quality opportunity sets. We expect BDCs to remain especially cautious when financing deals in the retail (including food & beverage) industry, given the distress in the sector. We also continue to see a steady supply of BDC portfolio distress from energy sector loans.

 

CLICK HERE for the 2Q17 BDC Health Report