On The Docket

Before the open on the last day of the week, there is very little to chew on where the BDC sector news is concerned. BDC prices continue to be a tad under their Monday high point. We will undertake a fuller analysis over the week-end in our BDC Common Stocks: Market Recap. Likewise for the BDCD fixed income sector, where – besides looking at price trends – we’ll mostly be reviewing the latest unsecured note offering from PennantPark Investment (PNNT).

We’ve been catching up on updating the BDC Earnings Calendar for the upcoming IQ 2021 results. Currently, there are 27 BDCs that have announced earnings release dates and follow-on conference calls. The earliest report will be coming from Horizon Technology Finance (HRZN), which had poor results in the IVQ 2021 , saw its stock price drop like a stone but then recover and re-join the ongoing rally.

Working On

Our goal in the days ahead is to review the current standing of as many BDCs as possible that have announced their quarterly release dates and write-up the main challenges and opportunities facing them in this new year. We will publish our thoughts for each BDC on these pages and in the BDC Earnings Calendar to serve as an aide memoire for readers – and ourselves – when the results are released and we’re being inundated with new developments. The principal themes that should be common to every BDC is questioning the direction of current earnings and how that might play out in dividend levels. (Despite the hot stock market for BDC stocks – and just about everything else – the BDC Reporter contends only a third of the BDC universe is likely to increase its payout in 2021 over the 2020 level, with the other two-thirds expected to report unchanged payouts or decreases. We’ll point out our expectations for each BDC we review). Also at the top of the agenda will be credit quality and whether the gradual improvement in asset values that followed the IQ 2021 drop will continue, raising NAV Per Share and investor spirits. On the credit side, we’ll identify some of the key portfolio companies whose credit could trend up or down in the period. We’ll also see how the “Great Refinancing” of BDC unsecured debt is going on a BDC-by-BDC basis and what potential interest savings from arranging new, cheaper debt might lie ahead. There will also be all sorts of idiosyncratic items specific to individual BDCs to discuss.

We’ll be starting with HRZN and working our way down the calendar as fast as we can before the results start popping out. These previews will serve as a useful starting point for our subsequent reviews of the IQ 2021 results. (We’ll be skipping FS-KKR Capital II and Harvest Capital because both BDCs are about to be merged into other players).