Leveraged Loan Insight & Analysis – 12/12/2022

BDC portfolio marks expected to move moderately lower

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BDCs navigated the most recent 3Q22 earnings season successfully, benefiting from the higher interest rate environment as rising base rates on their floating rate loans boosted interest income. At the same time, BDC net asset values declined modestly due to unrealized losses stemming from lower portfolio marks, caused by the widening in credit spreads and lower equity market prices.