BDC Quarterly Wrap: 3Q24

December 17, 2024 – The BDC Quarterly Wrap highlights select data points to provide a readout on BDC growth, structure, financing and asset quality. For context, growth data includes the entire BDC universe, which consists of 159 funds; all other data captures BDCs reporting financials by December 2nd, representing a universe of 155 funds.

Weighted average payment-in-kind (PIK) interest as a percentage of BDC total investment income (for BDCs that reported PIK income) was 6.66% in 3Q24 compared to 6.63% in 2Q24 and 5.69% in 3Q23, according to BDC Collateral. We include PIK interest as part of credit risk analysis because it captures loans that may be experiencing stress (i.e., converted from cash interest to PIK interest via amendment). However, as we’ve noted previously, not all PIK interest stems from conversions: Loans to performing companies are often structured with PIK optionality or partial PIK at origination. In 3Q24, new PIK investments accounted for 6.53% of new investments in BDCs, up from 5.67% in 2Q24 and down from 6.73% in the same period a year ago according to SOLVE.

About SOLVE

SOLVE is the leading market data platform provider for Fixed-Income securities, trusted by sophisticated buy-side and sell-side firms worldwide. Founded in 2011, SOLVE leverages its AI-driven technology and deep industry expertise to offer unparalleled transparency into markets, reduce risk, and save hundreds of hours across front-office workflows. With the largest real-time datasets for Securitized Products, Municipal Bonds, Corporate Bonds, Syndicated Bank Loans, Convertible Bonds, CDS, and Private Credit, SOLVE empowers clients to transform the way they bring new securities to market, trade on secondary markets, and value highly illiquid securities. Headquartered in New York, with offices across the globe, SOLVE is the definitive source for market pricing in Fixed-Income markets.