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BDC earnings season is just about over. (Waiting on newbie Great Elm Corporation). Looking at price levels in the market ( as we do every week) you’d think everything was hunky dory in BDC-land. However that’s far from the case with 7 dividend reductions in the period. Moreover-and less obviously-we can’t help noting that even some high flying BDCs have a large proportion of their portfolios on Watch List status. There have been some marked recoveries in credit quality (mostly in energy) and some well timed acquisitions will be saving some troubled companies from the Watch List. Nonetheless, there continues to be a steady trickle of new names coming off Performing status and into Non Performing. We’re beginning to compile our own list of which BDCs might not be able to maintain their pay-out levels a year from now. At first count, we have several names on our list, pressed potentially by those under performing assets and the spread compression going on in this super hot environment, where lenders are in charge.  Unfortunately, when the animal spirits that have been rampant in the markets for months eventually subside some of these fundamentals might set the scene for above average pull-backs in prices. We will start identifying the most vulnerable BDCs in the weeks ahead, and offer up the reasons why, leaving our readers to make up their own minds as to whether we are being realistic or alarmist.