Leveraged Loan Insight & Analysis – 9/6/2021

BDC asset valuations post gains in 2021


BDC’s have benefited from rising asset valuations in recent months, with both loan and equity holdings posting gains. During 2Q21 (the most recent quarter for which data is available), the weighted average mark on BDC debt holdings climbed to 97.71% from 97.18% in the prior quarter and is up from 96.41% at the start of the year.

Rising valuations have been posted across the risk spectrum this year, with second-lien loans in BDC’s outperforming first-liens amid strong lender demand for yield, a robust economic backdrop and sustained earnings growth.