Inflows, Competition to Pressure Perpetual BDC Earnings, Asset Quality
The elevated competitive underwriting environment for business development companies (BDCs) will persist in 2025 due to significant capital being raised, especially in perpetual, non-traded BDCs amid sluggish M&A activity. The difficult environment will negatively affect earnings and asset-quality metrics, while also pressuring spreads and deal structures across the middle market.
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