BDC Common Stocks Market Recap: Week Ended July 24, 2026

July 25, 2026

BDC COMMON STOCKS

Week 30

Wall Street’s major averages saw a second week of losses tied to higher oil prices and struggling technology stocks after some of the biggest names reported earnings...In economic news, the year-ahead business inflation expectations eased in July, while the U.S. PMI Composite rose to 53.6 in July, vs. 54.2 consensus, according to preliminary data released by S&P Global.

For the week, the S&P (SP500) lost 0.6%, while the tech-heavy Nasdaq Composite (COMP:IND) was 2.1% lower, and the blue-chip Dow (DJI) dropped 0.4%.-Wall Street Breakfast- Seeking Alpha-July 25, 2026

WEEK IN REVIEW

Gone In A Flash

All the price gains the BDC sector had racked in the 4 prior weeks evaporated in these last 5 days.

The only BDC sector exchange-traded fund, VanEck's BIZD, fell (3.0%), and the S&P BDC Index was (2.8%) down.

BIZD closed at $12.34, slightly below the closing level of $12.36 on Week 25, just before we got that mini-rally.

Markets are always jagging up and down, but the BDC sector's upward jags seem modest and to quickly end. We count 14 such upward moves followed by a descent just in the last 3 months.

Individual Metrics

44 of the 45 BDCs we track were in the red this week price-wise.

Of those, 11 fell by (3%) or more.

The biggest price drawdown was (8.6%) at Investcorp Credit Management (ICMB), which reached a new 52-week low.

As noted on these pages too many times before, ICMB is unlikely to remain a public BDC for much longer, but there was no news this week that underpinned the drop.

Speaking of new price lows, at least 11 BDCs (including ICMB) reached 52-week nadirs.

That's the highest number in 5 weeks.

Also notable is that the number of BDCs whose price was at or above their net asset value per share (NAVPS) fell to 5 from 7. See the BDC NAV Change Table.

Quiet in the News Room

All these weaker prices occurred during a week almost bereft of any BDC headlines.

The exception to the rule was an encouraging earnings preview from Hercules Capital (HTGC), which we analyzed for our readers.

The same BDC issued new unsecured notes during the week, which also triggered the BDC Reporter to have a look at the venture-debt BDC's borrowing costs.

The co-CEO of Blackstone Secured Lending (BXSL) departed, which we wrote about earlier today.

However, that article was more of an opinion piece about the stasis gripping much of the BDC industry at a difficult time and the need for more proactive policies to prevent shareholders from incurring even greater losses than they have already incurred.

We have no illusion that anyone is listening, but after two decades of covering the BDC sector, we felt the need to say something after watching both fundamentals and prices wither on the vine quarter after quarter.

WHERE WE STAND

Not A Pretty Sight

Here in Week 30, on the doorstep of the IIQ 2026 BDC earnings season, BIZD is only 3% above its 52-week low.

BIZD is (27.2%) below its 52-week high and (13%) down YTD.

The S&P BDC Index calculated on a total return is off (9.7%), even after more than half a year of dividends received taken into account.

YTD, 41 individual BDCs are down in price, and only 4 are in the black.

Our data show only 2 BDCs trading within 5% of their 52-week high and 1 between 5% and 10%.

You won't be surprised to hear that this trio of BDCs is also represented amongst the 5 BDCs trading at a premium to book.

By contrast, there are 10 BDCs trading between 5%-10% of their 52-week lows and 24 within 5% of the low.

That's three-quarters of the public BDC universe scraping around near the bottom 18 months after this decline began.

WHERE WE ARE HEADED

Unenthusiastic

Clearly, this week's red ink reflected investor skepticism about what 44 BDCs are about to reveal in the weeks ahead.

We've had some previews from Capital Southwest (CSWC), Main Street Capital (MAIN), Hercules Capital (HTGC), and Trinity Capital (TRIN), plus Saratoga Investment's (SAR) actual quarterly results through May 2026.

With the exception of SAR, the key metrics we were told about seemed to range from decent to very good.

However, the BDCs involved belong to the small group that has managed to outperform in recent quarters on fundamentals and whose aggregate value is only a small fraction of the public BDC market.

We surmise that investors are running scared about what they're going to hear from the larger BDCs that operate in the upper middle and core middle market.

Ares Capital's (ARCC) AUM alone is greater than all the better performing BDCs put together and then there's Blue Owl Capital (OBDC), Blue Owl Technology Finance (OTF), Black Stone Secured Lending (BXSL) and so many other BDC behemoths.

These are the BDCs most affected by concerns that AI will disrupt software borrowers, a debate that will not be resolved this quarter or even this year.

OUR VIEW

We've been reviewing the portfolios of the biggest BDCs, starting with ARCC and all the others. We lean heavily on our own research in the BDC Credit Reporter, where we identify all the "Important Underperformers". After all, these are the companies most likely to affect a BDC's book value and earnings power if they depreciate in value and/or become non-performing.

We launched the BDC Credit Reporter just for that purpose: to provide a heads-up about credit trends and how they might affect BDC fundamentals.

There are only about 130-150 Important Underperformers in a BDC-financed universe of thousands of companies, the vast majority of which are paying their interest and keeping their heads down.

However, these relatively few troubled borrowers can still wreak terrible devastation if enough of them turn up at the same time.

We've not completed our research, so we won't draw any grandiloquent conclusions. In any case, this is very much a BDC-by BDC story.

All we'll say at this stage is that investors are probably right to be jumpy.

We have been predicting that BDC NAVPS will not drop as sharply as in the IQ 2026, but there's no reason to believe credit corrosion will not continue this quarter, and beyond, at most BDCs.

Moreover, with very few BDCs able to sell new shares accretively and few earnings exceeding distributions, the only way most BDCs can increase their NAV is by buying back their own stock.

That can only go so far unless the managers decide to put themselves out of business, which is unlikely.

Anyway, the next few weeks of BDC reporting is going to be very important and we expect to see prices move wildly - both up and down - based on what investors find out.

INVESTMENT VIEW