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Truck manufacturer Navistar International announced quarterly EBITDA and earnings above expectations. The stock price has jumped. However, the BDC Credit Reporter has looked at the filings, reviewed the projections and analyzed the balance sheet, and is unenthusiastic about the prosoects for repayment at par of the Company's Subordinated Debt, principally held by Franklin Square BDCs.

Oil price drop

Oil and gas producer Linc USA GP, and other affiliates, has filed for Chapter 11 bankruptcy. Senior secured lenders providing $10mn in Debtor In Possession financing. Company is seeking to sell many of its assets to repay lenders. BDC exposure: Business Development Corporation of America with $8.9mn in Second Lien debt. Already written down 99% at 3-31-2016. Pennant Park (PNNT)…


Chemical company Vertellus Specialties Inc. has filed for bankruptcy. Vertellus reports liabilities of $710mn, including $455mn in senior first lien secured debt. Sales were $596mn in 2015, and EBITDA $61mn. Company appears to be negotiating debt for equity swap with senior lenders. Many existing senior lenders are providing Debtor In Possession financing of $110mn. BDC exposure principally to BlackRock Investment…

Alert Written Out

5-31-2016: Back in late April 2016, Triangle Petroleum-a publicly traded oil and gas company-received notice from its asset-based lender Wells Fargo that its borrowing base was being reduced due to the lower price of oil. The amount of the borrowing base was $125mn lower than outstandings under the Wells Fargo facility. As per the agreement, the Company had until May…

Big data software company MSC Software Inc. was downgraded by Moody's, both corporate rating and second lien public debt. Moody's cites high leverage and financial performance. BDC exposure of $35,091,000 at Cost and $30,479,000 at FMV at 3-31-2016 is all in Second Lien. BDCs invested are Cion Investment Corporation, TCP Capital (TCPC) and Apollo Investment (AINV), listed in decreasing exposure…


The BDC Credit Reporter updates credit developments to any Business Development Company portfolio company daily in our Master Database. Here we highlight the day's biggest credit story with extracts from our proprietary files and using portfolio ownership from Advantage Data: the return of Aspect Software from bankruptcy and what might happen to the $68mn invested by 4 BDCs.

Alert Written Out

Speed Commerce has just turned over its assets to its lenders-who include two Business Development Companies-in return for cancellation of its debts. Big realized losses are likely to ensue at both Garrison Capital (GARS) and Credit Suisse BDC-a non-traded entity. The BDC Credit Reporter has updated its file and provides a summary of what happened.

Update Red Button

5-21-2016:  We've just updated our file on AAR Intermediate Holdings, a privately-held oil services company owned by multiple Business Development Companies (including Medley Capital and CM Finance) and which is on non-accrual. Not much has happened this quarter from a valuation perspective. Nonetheless, we expect the $4mn in equity exposure by the BDCs to be written off, and 50%-100% of…


5-19-2016: Sports retailer Dick's Sporting Goods reported weaker than expected sales in the first quarter of 2016, despite weaker competition from several bankrupt competitors. Key metrics from the BDC Credit Reporter's standpoint:  "Same-store sales are expected to decline 4% to 1%...[Actual] Same-store sales edged up 0.5%... Same-store sales for Dick's Sporting Goods increased 0.4%, while Golf Galaxy rose 1.7%." This…


The BDC Credit Reporter undertakes an in-depth review of Fifth Street Senior Floating Rate's (FSFR) investment portfolio following the release of the first quarter 2016 10-Q filing, and using additional information from Advantage Data. We look at realized credit losses and potential write-downs in the quarter and over time. Required reading (if we do say so ourselves) for any investor in FSFR.