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BDCs trade at a steep discount, but the risks the bears talk about most may not be the ones that matter. One overlooked risk, hidden in loans made years ago, is already hurting several well-known names. Some of the most popular BDCs may be more exposed than their results suggest, and the moment of truth is getting closer.
Business development companies are an overlooked corner of private credit and a chance for individual investors. Market fear has pushed some high-yield BDCs well below their net asset value, despite solid fundamentals. I highlight two discounted BDCs with strong balance sheets, healthy loan books, and well-covered dividends.
Five major BDCs—Blue Owl Technology Finance Corp., FS KKR Capital Corp, Morgan Stanley Direct Lending Fund, Blue Owl Capital Corporation, and Oaktree Specialty Lending Corporation—trade at steep discounts to NAV, implying extreme loan losses not reflected in credit performance. Current market prices require annualized loan losses far exceeding historical peaks, despite portfolios of senior secured, diversified loans and low non-accruals. Buybacks at deep discounts signal management confidence in loan valuations, with OTF and FSK notably active in repurchasing shares.
LOS ANGELES--(BUSINESS WIRE)--Oaktree Specialty Lending Corporation (NASDAQ:OCSL) (“Oaktree Specialty Lending” or the “Company”) today announced that it will report its financial results for the fourth fiscal quarter and full year ended September 30, 2026 before the opening of the Nasdaq Global Select Market on Tuesday, November 17, 2026. Management will host a conference call to discuss the results on the same day at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time. The conference call may be a.
BDC valuations have dropped to levels seen only a few times in the sector's history, which creates a rare entry point for patient investors. The usual household names may not be the safe haven many assume, especially as a credit cycle looms. I highlight 2 lesser-known BDCs that come out ahead on fees, portfolio quality and leverage.
We take a look at the action in business development companies through the second week of September and highlight some of the key themes we are watching. BDCs declined amid rising yields, Fed rate hike expectations, and geopolitical tensions. Recent bond issuances by ARCC, CSWC, OCSL, and OTF highlight sector-wide net income headwinds from refinancing at higher rates.
HighTower Advisors LLC trimmed its position in Oaktree Specialty Lending Corp. (NASDAQ: OCSL) by 38.8% during the second quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 188,588 shares of the credit services provider's stock after selling 119,599 shares during