BDC Common Stocks Market Recap: Two Weeks Ended May 15, 2026

BDC COMMON STOCKS

Weeks 19 and 20

INTRODUCTION: The BDC Reporter was away last week in a case of poor holiday scheduling. However, we’re now back to review how BDC sector prices have fared in the past fortnight.

LATEST RESULTS

No Bottom

BDC earnings season came and went in a flurry.

All BDCs have now reported their IQ 2026 results, including Saratoga Investment (SAR), whose numbers are through the end of February.

Investors have clearly not been impressed – to put it kindly.

This week and last, the BDC ETF with the ticker BIZD dropped (2.9%) and (2.2%), respectively.

In the last 5 trading days, 39 BDCs were in the red, and only 6 were in the black.

Moreover, 21 of the BDCs dropping in price did so by more than (3.0%). 

That’s not a weekly record in these parlous times, but still a very high metric months into this declining market.

Furthermore, as this chart shows, 4 BDCs fell by more than (10.0%):

Crescent Capital’s (CCAP) black mark was its decision to cut its dividend, one of many BDCs to have chosen that route this earnings season.

Investors may also have been spooked by the announcement of several new non-accruals appearing on the BDC’s books. 

Just over a year ago, CCAP’s stock price peaked at $20.00 a share. On Friday, the stock was at $11.13, a (44%) decline.

It’s a similar story at ICMB, PSEC, and PNNT – down between (39%) and (51%) in the last 12 months, according to Seeking Alpha. 

Lower

This week also saw 6 BDCs reach new one-year price lows.

That’s not so unusual these days, but we’re not accustomed to seeing the most popular BDC of all on that list: Main Street Capital (MAIN).

The lower-middle-market BDC announced a higher net asset value per share for the quarter and increased its regular dividends, but that was not enough for the market.

As of Friday, MAIN is trading (26%) below its 52-week high.

Nonetheless, the BDC continues to trade at a 62% premium to book and yields only a single-digit percentage return. 

At this point, MAIN is at its lowest level since the fall of 2024.

All those would-be investors who used to say that MAIN was too expensive and were waiting for a more appropriate “entry point” will have a decision to make.

Glimmers

Incredibly, there were a few winners this week. 

As mentioned, 6 BDCs saw their prices rise, but all are in the red over 6 months or 2026 YTD.

The 5 BDCs that have managed to increase in price this year were all in the red this week, including the leader of the pack, Gladstone Investment (GAIN). 

WHERE WE ARE

Pretty Bad

After 20 weeks of 2026, the public BDC sector is in a parlous state.

The news on Friday that Federal prosecutors have turned their attention to the valuation practices of BlackRock TCP Capital (TCPC) cannot help.

Even if the investigation underway ends with more of a whimper than a bang – which is our expectation – the market may get spooked by the implication that BDC assets are not being properly valued.

“If BlackRock cannot be trusted, then who can? “ may become the refrain heard across the market.

Investors need to have confidence that the numbers being reported are accurate, and the government could be opening a can of worms or Pandora’s box – take your choice – by engaging in this investigation.

We’ll be following that story in the weeks ahead.

Once Again

Right now, though, the BDC sector is back in “correction” territory in 2026, off (11.1%).

BIZD is (26%) below its 52-week high and (29%) lower than the peak reached in February 2025.

As of last Friday, the ETF is just 5% above its 52-week low.

11 BDCs are trading less than 5% off their 52-week lows, and 10 are between 5% and 10% off.

By contrast, there are 3 BDCs within 5% of their 52-week highs, and none between 5% and 10%.

Overall, these are very poor price metrics, but they are not the worst we’ve seen.

WHERE WE ARE HEADED

Bull Case

We’ve been market watching for a long time, and at times we’ve seen a run-up in prices at the end of an earnings season as investors reassess and start looking for bargains among the very BDCs they tossed aside just a few days or weeks earlier.

There are a few reasons to be optimistic going forward.

On the macro front, there seems to be little risk that the Fed will cut rates in the short term, and all the late-2025 rate reductions have played out by now. 

The fears surrounding an AI-driven software credit bloodbath have widened spreads on new loans, especially in the upper-middle market.

If sustained, that will help BDC earnings going forward, but the full impact will take several quarters to show up. 

On the credit side, we’ve seen plenty of lower loan valuations in the most recent quarter, but relatively few new troubled borrowers.

At this point, there’s still no sign that there is any systemic credit “crack-up” in the BDC sector, even if several high-profile players have a credit mess to contend with.

For every TCPC, there are two other BDCs of a similar size and market orientation whose losses and non-accruals are modest to almost non-existent. 

Finally, even after the multiple dividend reductions announced of late, the yields on offer are very attractive.

Some of the “best” names in the business are yielding in the low double digits, boast strong liquidity and low leverage, and are enjoying lender-friendly conditions.

Bear Case

On the other hand, once a snowball starts rolling down a mountain, it tends to gather size and momentum.

The fact of the matter is that if you just look at the BDC NAV Change Table, you can see that BDC NAVPS has been deteriorating for 4 quarters in a row.

This past quarter was the worst of all.

Furthermore, there are still a number of BDCs whose earnings may not be sufficient to sustain their dividends going forward, and whose managers may choose to cut their payouts in the months ahead.

As we’ve seen with CCAP this week, investors do not react favorably to dividend reductions, even if necessary and sensible.

We are also wondering why Apollo Global might be considering selling its publicly traded BDC, MidCap Financial (MFIC), as reported.

Admittedly, the BDC has not performed well of late but is not in the same sort of trouble as FS KKR Capital (FSK); Oaktree Specialty Lending (OCSL), Prospect Capital (PSEC), and – of course – TCPC. 

When an asset manager sells its flagship public credit vehicle – if the story is true – you have to wonder what the market will think.

Critical Time

The next few weeks and months will be very interesting for anyone interested in the public BDC common stock market.

Will confidence – already on the thin side – continue to diminish and bring all BDC stocks down?

Or, will we see a highly bifurcated market, with many BDCs struggling to remain viable vehicles, while others perform as their managers and investors have expected?

Unlikely

The least likely scenario is a rising tide that lifts all boats price-wise.

There are just too many BDCs – including some brand names – whose financial performance has been so poor as to preclude any sustained bounce back.

As we’ve said before, multiple BDCs could end up treading the same path as Investcorp Credit Management (ICMB).

ICMB is shrinking in size, is not paying a dividend, and has hired a financial adviser to find a buyer or another way out.

 This quarter, we saw FSK’s external manager  offer up multiple “strategic value enhancement actions.” 

However, that occurred only after a loss of one-third of the BDC’s NAVPS over the last 4 years and a halving of its stock price.

Generally speaking, by the time the cavalry is sent in by the asset manager, there is little left to save.