Tight Spreads, Rising Non-Accruals to Further Weaken BDC Earnings

Fitch Ratings|April 2, 2025

Content hub / Article / Fitch Ratings / Tight Spreads, Rising Non-Accruals to Further Weaken BDC Earnings

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Continued spread pressure and additional non-accruals will likely weaken earnings and dividend coverage for business development companies (BDCs). Net investment income (NII) as a percentage of BDCs’ portfolios declined in 4Q24 due to lower portfolio yields from rate cuts and tighter spreads.

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