Public BDCs Are Pricing In Most Pain Since Covid

Private credit’s aggressive push to court retail investors has exposed the industry to a less familiar threat: public market volatility, which is dragging business development company shares toward their steepest discounts relative to their assets since the pandemic.

A string of publicly-traded BDCs have posted earnings over the past month — the first since a number of private BDC vehicles faced a wave of redemptions. And the data were stark: credit losses are climbing, new lending is falling and portfolios are shrinking.