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BDC Dividend Outlook: Changes To Rating System

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The BDC Reporter launched an experiment in seeking to rate the sustainability of Business Development Company dividends late in 2017. We’re still experimenting with the format and have decided to expand our rating system from three choices: UNCHANGED, AT RISK and DECREASE to four, adding INCREASE. With the latest rating, we hope to capture for readers attention those few and and proud BDCs we estimate more likely than not to raise their regular distributions in the 12 month period since their latest financial reporting.

We realized the prior system was not comprehensive enough when Saratoga Investment (SAR) increased its dividend – again. There are 5 BDCs that raised their payouts last year (not including Special Distributions-which are less  reliable). We anticipate – after a review of the portfolio that as many as 6 BDCs could increase their payouts in the rest of 2018. That includes Saratoga yet again, along with SLRC (which has already boosted), NEWT (promising a 3% growth),MAIN, GAIN and CSWC. Check out the Dividend Outlook Table for the changes made.

We’re also adding a Dividend Outlook Update list to the Tools section, where we bring readers the latest information about any changes we’ve made to our views, or re-affirm existing predictions after earnings or distributions are announced.

That leaves the BDC Dividend Outlook scorecard looking like this after 3 dividend cuts this year (all projected by the BDC Reporter) at OCSL, OCSI and HCAP. We’ll undertake a full update once all BDCs have reported year end 2017 results.


BDCR Projects 6 20 15 5
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