Business development companies, the most visible pocket of the $800 billion private credit market, face more dividend cuts and possibly even restructurings later this year after the Covid-19 pandemic has bruised their portfolios.
The companies this month released results for the quarter ended March 31, and the industry saw steep drop-offs in the value of investments and other headwinds caused by the new coronavirus. BDCs that wrote down the loans they own by about 6.5% ended up posting declines in their net asset value per share ranging between 6% and 30%, according to JMP Securities analyst Christopher York.
