BDC Sector Reaches New Lows: April 7, 2025
Ever More Blood In The Streets
NEWS
At the close on Monday April 7, 2025 the only BDC exchange-traded fund – ticker BIZD – closed at a price of $14.22, down from $14.89 at the close on Friday April 4, 2025. Intra-day, BIZD dropped as low as $13.85.
The volume of shares traded was 4.8mn, more than 4x the average level.
ANALYSIS
Out Of Date
Typically, we write about BDC prices once a week – the world famous BDC Common Stocks Market Recap – the latest of these we published over the week-end.
However, matters are moving so fast in the market we thought it might be useful to update our readers what has happened in the first trading day of the week since our last survey.
We’ve not seen price movements of this magnitude since the spring of 2020 and the drastic shifts deserve constant chronicling till matters settle down.
No News Is No News
We should say straight out that none of the price changes we are about to mention are related to any developments in the BDC sector itself.
The only press release we’ve seen today are IQ 2025 earnings announcements for two public BDCs, which we’ve already aded to the BDC Earnings Calendar – that valuable Investor Tool.
Investors are parsing the much broader macro-economic and political environment and – clearly – not liking what they see.
Major Metrics
BIZD’s stock price dropped from its close last Friday by as much as (7.0%), but ended up “only” (4.5%) down.
Calculating from the latest 52 week low to the 52 week high of $17.86, BIZD has dropped (22.5%).
On a 2025 YTD price basis, the ETF is down (14.5%).
Comparables
The S&P 500 – oscillated in price all day – but ended up down only (0.23%).
2025 YTD – according to S&P data – the famous index is down (13.73%).
For a time, BIZD was out-performing the S&P 500 in price terms during this pullback, but – as the song goes – that’s over now.
We sensed this lead might not last. Here’s what we wrote on Sunday in BDC Best Ideas to our shell shocked subscribers:
…The BDC total return rarely out-performs the S&P 500 and then not for long. However, since Week 4 of 2025 the BDC sector has out-performed, and even held its lead after this difficult week even though the S&P 500 performed a little less horribly. Can this last? We’d like to say so but if the general consensus is a terrible recession this way comes, historic data suggests credit investments will take a beating.That’s not happened so far and credit spreads have held up well across all sorts of non-investment grade instruments, but how long will that last?
BDC BEST IDEAS – april 6, 2025
Back In Time
At this point, BIZD’s price has fallen back to its level in October 2023, when the ETF was having a soft period.
Individual BDCs
A remarkable 41 BDCs – out of 46 we track – fell to new 52 week lows on Monday.
In all of last week, an already impressive 29 BDCs recorded new lows.
Just for illustration purposes, here are the 10 Biggest Losers in percentage price terms on Monday:
Last Friday, 13 BDCs were still trading at or above their Net Asset Value Per Share (NAVPS).
Now that number has dropped to 9.
Very Red
According to Seeking Alpha data, at this point in 2025, 43 BDCs stock price is lower than at the end of 2024.
Here are the top ten 2025 Biggest Losers:
Regular readers will recognize that most of the names above have under-performed in the most recent qusrter – or longer – and are paying an outsized price for disappointing nervous investors.
The only exception to that statement might be Carlyle Secured Lending (CGBD), which might be enduring more of a price drain than one would have expected due to its many newly minted shareholders following its recent merger with a sister, non-traded BDC.
Views
Key Take-Away
Just weeks after reaching a 52 week high, BIZD is well into “Bear” territory as are most of its constituent BDCs.
Paid To Own?
If everything else was equal, the prospective yield – based on the recent $0.4300 per share IQ 2025 dividend annualized – is 12.1%.
Over at BDC Best Ideas – where we’ve projected the likely payout in 2025 for 41 BDCs – 16 are now projected to pay out a yield over 15%.
Maybe. Maybe Not
Of course, nobody knows if prices have bottomed out or not.
The huge trading volume does suggest that most investors who wanted out must have hit the Sell button by now.
However, as this chart of BIZD during the Covid crisis shows, there were multiple days with plenty of trading volume as its price descended from highest to lowest:
Afraid So
Unfortunately – even with as much damage as incurred since tariffs became an issue – the history of BIZD suggests prices could drop much, much more.
As we’ve noted before, during Covid BIZD dropped in half and just one month.
We’re only halfway there.
Cavalry
In 2020 markets were saved by their benevolent government and by the Fed.
Can anyone say with their hand on their hearts that we’ll get a repeat this time?
The Administration seems determined to push on regardless and the Fed is fretting about inflation.
Even if rates were to be cut, how much solace could businesses take when so much else in their financial standing is up in the air.
If anything, an unexpected rate cut might be viewed as a signal that the Fed sees a recession as the likeliest outcome and that might cause a stock sell-off.
Final Word
The BDC Reporter has no view – as always – about where prices go on Tuesday or in the days ahead.
All we can offer is this damage assessment as this episode plays out.
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