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BDC Portfolio Company: Possible Chapter 11

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Our sister company – the BDC Credit Reporter has just filed a new post about a BDC portfolio company involved in casino and lodging, which is considering a Chapter 11 filing.  Given the size of the BDC exposure ($67.3mn) at cost; and the investment income involved ($7.3mn); we are bringing the negative development to our readers attention.  There are two public BDCs involved: PennantPark Floating Rate (PFLT) and CM Finance (CMFN) as well as a non-traded fund Business Development Corporation of America (BDCA), all invested in the 2023 first lien debt, but none invulnerable in the case of a bankruptcy filing.  PFLT is just recovering from seeing 4 companies go on non-accrual in the IQ 2019. One new addition to the list would be an unwelcome development. CMFN has not yet reported second quarter results, but had one portfolio company on non accrual at  3/31/2019.

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