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7 min read Market Recap — Debt

BDC Common Stocks Market Recap: Week Ended August 7, 2026

BDC prices rallied this week more than they've done since 2020. We review the remarkable price metrics and assess where that leaves the sector after 32 weeks. Finally, the BDC Reporter discusses the potential way ahead and our own view.

August 8, 2026

BDC COMMON STOCKS

Week 32

Wall Street finished the week higher, with both the blue-chip Dow (DJI) and the benchmark S&P 500 (SP500) hitting fresh all-time highs...U.S. nonfarm payrolls declined by 23K in July, missing the +88K consensus and erasing the 20K increase in June, according to data released by the U.S. Bureau of Labor Statistics on Friday.

For the week, the S&P (SP500) added +3.6%, while the tech-heavy Nasdaq Composite (COMP:IND) climbed +5.2%, and the blue-chip Dow (DJI) advanced +3.0%. - Seeking Alpha - Wall Street Breakfast- August 8, 2026

WEEK IN REVIEW

Rally!

After months of languishing, BDC investors picked themselves up this week and went on an indiscriminate buying spree.

BIZD, the sector exchange-traded fund sponsored by asset manager VanEck, was up 8.1% in the past five days, closing at $13.41.

We keep weekly records that go way back, and we can report that this was the largest percentage increase in the price of BIZD since the ETF rebounded from its historic lows during COVID in 2020.

This was huge, and 44 of the 45 BDCs we track were caught up in the enthusiasm.

40 of those BDCs in the black increased by 3.0% or more in price.

The emphasis should be on the "more", given that 17 BDCs moved up more than 10% and 3 of those bounded up more than 20% in price.

In addition, the number of BDCs trading at or above net asset value per share, which had fallen to just 5 names a fortnight ago and 8 a week ago, increased to 10.

However, it's a testament to how far BDC prices have fallen in the past 18 months that only one solitary BDC - Capital Southwest (CSWC) - reached a new 52-week price high.

Why?

This sudden shift in sentiment - the prior week saw BIZD only move up 0.5% - appears to have been triggered by investors' relief that IIQ 2026 BDC results were not as bad as IQ 2026, or as they feared they might be.

We've heard from 36 of the 45 public BDCs, including all the giants, and the ones most often in the headlines - usually for the wrong reasons.

As we've noted, some of the individual BDC price increases were seismic, if that's the right word.

Here are the top 5 by way of illustration:

The BlackRock TCP Capital (TCPC) story is the most interesting one.

As we discussed at great length within minutes of the press release in an article, BlackRock has arranged to sell nearly half the BDC's portfolio to a so-called "Continuation vehicle".

Moreover, evidence abounds that the asset manager might have plans for what remains of TCPC outside of getting back to business as usual.

This was greeted by TCPC's shareholders much as Parisians did the liberation of Paris in 1944, even though the BDC's earnings - already weak - are likely to drop sharply and the dividend will be sliced and diced in future periods.

Up

CION Investment (CION) has no such plans, but reported an increase in its NAVPS after booking two consecutive prior quarters of decreases. Recurring earnings per share, helped by one-time items, also increased.

The BDC received a 1 rating from the BDC Reporter in the BDC Performance Table, which we're still in the process of updating.

Runway Growth (RWAY) saw its NAVPS materially eecline in value but its earnings greatly increased quarter over quarter.

Investors chose to ignore the former and focus on the latter.

For a week, at least, investors decided not to worry about the "SaaS-pocalypse", boosting Blue Owl Technology Finance's (OTF) stock price in a quarter where its NAVPS, earnings, and non-accrual levels were almost unchanged from the quarter before.

FS-KKR Capital (FSK) recorded higher earnings in the IIQ 2026, but only due to a temporary fee waiver. Its NAVPS dropped for a third quarter in a row and is now down (17%) since the IIIQ 2025. Nonetheless, investors decided the KKR-managed BDC had been punished enough and pushed up its price.

This was an indiscriminate, across-the-board rally, leaving only tiny Oxford Square Capital (OXSQ) with a lower price on August 7 than on July 31st.

WHERE WE STAND

Re-Think

This mighty move has changed the BDC landscape here in Week 32.

BIZD, which was in "correction mode" only last week, down (12.9%) in 2026, is now "only" (5.4%) in the red.

One more week like this and the ETF will be in the black, something not experienced since Week 4.

The S&P BDC Index, calculated on a total return, is just (1.4%) in the red and could readily return to a positive reading in a day or two if the current rally holds.

(However, we remain far, far behind the over-achieving S&P Index, calculated on a total return basis, which is up 14.1% already in 2026).

Reality Check

All the above is very encouraging if you're a BDC investor.

However, we must not forget how far the sector - and most of its denizens - had fallen before this week.

Even now, only 8 BDCs are trading in the black in 2026 and just 4 over a 12-month time frame.

At this stage, only 4 BDCs are trading within 10% of their 52-week highs.

By ticker, the most popular BDCs are CSWC, BBDC, GAIN, and TRIN.

On the other hand, there's been a great clean-out of the price basement.

Two weeks ago, 34 BDCs traded within 10% of their lows.

This week, the number is just 6.

Worst off is MidCap Financial (MFIC), whose management seems to have plans for the BDC that they are not sharing with its shareholders. See our article on this prickly subject.

WHERE WE ARE HEADED

Yes, But

We may have been surprised by the ferocity of investor sentiment this week, but not by the direction of travel.

As we've mused in prior articles. BDC prices have dropped so much and for so long that the odds of an upward bounce were always good.

We wondered if investors might bid up the sector just before earnings season because the writing was already on the wall that this quarter's results would be nowhere as bad as in the prior period.

That didn't happen, nor did investors pounce in the first week of earnings season, i.e., the week before last.

Apparently, as this 5-day chart of BIZD below shows, a bell rang around mid-week, and we were off to the races:

One Possibility

This may be the beginning of a long-term rally, as investors shed their fears about BDC earnings and creditworthiness and grab at the very juicy yields still available.

See the BDC Dividend Outlook Table for a survey of those yields across the BDC universe.

We have color-coded the boxes, and everything in orange, light green or bright green yields in double-digits.

The BDC Reporter has projected each BDC's payout for both 2026 - already coming to a close for many BDCs - and 2027.

Even next year, there are still 34 BDCs promising a 10%+ yield.

For many investors, that might seem as easy as picking a $100 bill off the pavement.

Another Possibility

Unfortunately, our own view is that this rally will eventually go the way of all the recent revivals in sentiment the public BDC sector has experienced.

By our count, 7 times since May of this year, BIZD has moved up sharply in a short period.

On 6 prior occasions, prices have moved back down within days.

Admittedly, this most recent uptake is the most powerful we've seen in some time, returning BIZD to its level in February.

However, that very virulence might make BDC prices all the more vulnerable to falling back.

INVESTMENT VIEW

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Our lack of enthusiasm has much to do with our initial review of the IIQ 2026 BDC fundamentals we've had the time to go through so far. Admittedly, we've not yet systematically reviewed all 36 BDCs that have reported. However, we've dug into enough of the performance metrics to recognize that many BDCs continue to have serious challenges, mostly where credit performance is concerned. This mostly consists of "death-by-a-thousand-cuts", but the ultimate result is the same. Even some of the BDCs whose earnings and/or NAVPS increased this quarter are likely to return to deficit numbers in the rwst of 2026. Moreover, none of the catalysts that might boost BDC earnings longer term appear to be coming into play. This week's payroll numbers could result in the Fed - with its eye in what the White House wants - maintaining , or even reducing rates later in the year. (We know others would argue the opposite, but this is our unalloyed viewpoint). BDC portfolio yields have stabilized but they're not likely to increase, unsecured debt remains expensive and managers seem unwilling to make whosesale compensation concessions. In fact, we were a little surprised at the relatively modest share repurchases in the IIQ 2026 that went on at a time when BDC prices were at bargain lows. That's partly because some BDCs are pushing against their leverage limits and others want to protect their capital as the chances of raising more in the near future seems remote. The bottom line, we don't see the ingredients for a long, sustained rally that would bring BIZD, and the component BDC stocks, back to prior highs, or even the level at the end of 2025.

BEST IDEAS

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We're still deciding whether to make any changes to our Best Ideas Table. We did move Barings BDC (BBDC) from a BUY to a HOLD, but only because the stock increased by more than 10% in the twinkling of an eye. We retain our BUY ratings on MAIN, MSIF and TRIN, although all 3 have moved up sharply in price. Then there are 8 BDCs we have a HOLD on, including BBDC. Most have reported their IIQ 2026 results and justified our faith in them, but only become more expensive in the meantime. That leaves 34 DON'T BUYs. So far, we've not felt compelled to change our minds, even at the risk of missing out on a turnaround. We remain cautious. One good week where BDC prices are concerned is not enough to change our viewpoint.

Published by:

Gabriel N Marshi

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